Welfare-ranking ad valorem and specific tariffs under monopolistic competition
Actual trade and tariff policy prefers ad valorem tariffs to specific tariffs. Yet in this paper we show that, in a setting of monopolistic competition, realizing a given restriction on imports via a specific tariff would generate more consumer utility than obtaining the same restriction via an ad valorem tariff.
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Volume (Year): 38 (2005)
Issue (Month): 1 (February)
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