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Tariffs in a Ricardian Model with a Monopolistically Competitive Sector: the Role of Nontradables

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  • Partha Sen

Abstract

It is shown that for a small open economy the welfare effects of a tariff on the import of the brands of a differentiated good depends crucially on the pattern of trade. The literature has shown that welfare rises when the domestic brands are nontraded. But when the domestic brands are traded, the imposition of a tariff lowers welfare by shifting demand towards the nontraded homogeneous good which causes exit from the differentiated goods industry. Copyright Blackwell Publishing Ltd 2005.

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  • Partha Sen, 2005. "Tariffs in a Ricardian Model with a Monopolistically Competitive Sector: the Role of Nontradables," Review of International Economics, Wiley Blackwell, vol. 13(4), pages 676-681, September.
  • Handle: RePEc:bla:reviec:v:13:y:2005:i:4:p:676-681
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    1. Helpman, E., 1990. "Monopolistic Competition In Trade Theory," Princeton Studies in International Economics 16, International Economics Section, Departement of Economics Princeton University,.
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    Cited by:

    1. Aquiles Kalatzis & Carlos Alberto Cinquetti, "undated". "Technology Service and Factor Content: the Export Impact From Multinationals," EcoMod2007 23900039, EcoMod.
    2. Romain Restout, 2008. "Monopolistic Competition and the Dependent Economy Model," Working Papers 0803, Groupe d'Analyse et de Théorie Economique Lyon St-Étienne (GATE Lyon St-Étienne), Université de Lyon.
    3. Carlos A. Cinquetti, 2008. "Multinationals and Exports in a Large and Protected Developing Country," Review of International Economics, Wiley Blackwell, vol. 16(5), pages 904-918, November.

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