Tariff Wars and Trade Deals with Costly Government
The authors study a simple model of tariff wars and trade deals in which government revenue collection and disbursement uses resources. The introduction of costly governments leads to lower non-cooperative tariffs, the possibility that a less costly government may win a tariff war, and fully cooperative trade deals where countries lower tariffs but do not eliminate them, even with lump-sum taxes and transfers. Copyright Blackwell Publishing Ltd 2004.
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Volume (Year): 12 (2004)
Issue (Month): 3 (08)
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References listed on IDEAS
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- Grossman, Gene & Helpman, Elhanan, 1993. "Protection for Sale," CEPR Discussion Papers 827, C.E.P.R. Discussion Papers.
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