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Tariffs, Quotas, and Voluntary Export Restraints with and without Internationally Mobile Capital

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  • Peter Neary

Abstract

This paper presents a general framework for comparing the effects of tariffs, quotas, and voluntary export restraints both with and without international capital mobility. Expressions for the shadow price of foreign exchange and the shadow price of capital under each type of trade restriction are derived, an d it is shown that, although international capital mobility raises the welfare cost of tariff protection, it lowers the welfare cost of quantitative restrictions. In all cases, the effects of exogenous shocks in the presence of quotas are intermediate betwe en those in the presence of tariffs and those in the presence of voluntary export restraints.

Suggested Citation

  • Peter Neary, 1988. "Tariffs, Quotas, and Voluntary Export Restraints with and without Internationally Mobile Capital," Canadian Journal of Economics, Canadian Economics Association, vol. 21(4), pages 714-735, November.
  • Handle: RePEc:cje:issued:v:21:y:1988:i:4:p:714-35
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    References listed on IDEAS

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    1. Robin Boadway & Neil Bruce & Jack Mintz, 1984. "Taxation, Inflation, and the Effective Marginal Tax Rate on Capital in Canada," Canadian Journal of Economics, Canadian Economics Association, vol. 17(1), pages 62-79, February.
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    Cited by:

    1. James E. Anderson & J. Peter Neary, 1996. "A New Approach to Evaluating Trade Policy," Review of Economic Studies, Oxford University Press, vol. 63(1), pages 107-125.
    2. Henrik Egbert & Nadeem Naqvi, 2011. "Market-dependent Production Set," MAGKS Papers on Economics 201145, Philipps-Universität Marburg, Faculty of Business Administration and Economics, Department of Economics (Volkswirtschaftliche Abteilung).
    3. Chi-Chur Chao & Eden S. H. Yu, 2014. "Export-Share Requirements, Trade Balances, and Welfare: A Two-Period Analysis," World Scientific Book Chapters,in: TRADE-RELATED INVESTMENT MEASURES Theory and Applications, chapter 5, pages 77-89 World Scientific Publishing Co. Pte. Ltd..
    4. Yilmaz, Alper, 1999. "Host Country Welfare Effects Of Foreign Direct Investment (Fdi) And Imports: An Application To The Processed Food Industry," 1999 Annual meeting, August 8-11, Nashville, TN 21585, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    5. Jaime de Melo & David Tarr, 2015. "VERs under imperfect competition and foreign direct investment: A case study of the US–Japan auto VER," World Scientific Book Chapters,in: Modeling Developing Countries' Policies in General Equilibrium, chapter 22, pages 461-483 World Scientific Publishing Co. Pte. Ltd..
    6. Yu, Eden S. H. & Chi-Chur, Chao, 1996. "Are wholly foreign-owned enterprises better than joint ventures?," Journal of International Economics, Elsevier, vol. 40(1-2), pages 225-237, February.
    7. Anderson, James E & Bannister, Geoffrey J & Neary, J Peter, 1995. "Domestic Distortions and International Trade," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 36(1), pages 139-157, February.
    8. Beladi, Hamid & Chao, Chi-Chur & Frasca, Ralph, 1999. "Foreign investment and environmental regulations in LDCs," Resource and Energy Economics, Elsevier, vol. 21(2), pages 191-199, May.
    9. David Franck & Nadeem Naqvi, 2000. "LDCs, International Capital Mobility and the Shadow Price of Foreign Exchange under Tariffs and Quantitative Restrictions," Journal of Economic Development, Chung-Ang Unviersity, Department of Economics, vol. 25(2), pages 43-54, December.
    10. Chao, Chi-Chur & Yu, Eden S. H., 1999. "Shadow prices and trade restrictions in a monetary economy," Journal of Macroeconomics, Elsevier, vol. 21(4), pages 755-764.
    11. Chao, Chi-Chur & Yu, Eden S. H., 1995. "The shadow price of foreign exchange in a dual economy," Journal of Development Economics, Elsevier, vol. 46(1), pages 195-202, February.
    12. Krishna, Pravin & Panagariya, Arvind, 2000. "A unification of second best results in international trade," Journal of International Economics, Elsevier, vol. 52(2), pages 235-257, December.
    13. Kreickemeier, Udo, 2001. "The shadow price of foreign exchange with minimum wages," Economics Letters, Elsevier, vol. 72(3), pages 369-373, September.
    14. Widodo, Tri, 2016. "Comparative Advantage of Energy Products in the Midst of ASEAN Economic Integration," MPRA Paper 79964, University Library of Munich, Germany.
    15. repec:era:chaptr:2013-rpr-29-05 is not listed on IDEAS
    16. Naqvi, Nadeem, 2009. "Structure versus Agency in the Great Deprivation of 21st Century," MPRA Paper 12497, University Library of Munich, Germany.
    17. Devereux, John & Roberts, Bryan, 1997. "Direct Foreign Investment and Welfare in the Transforming Economies: The Case of Central Asia," Journal of Comparative Economics, Elsevier, vol. 24(3), pages 297-312, June.

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