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The optimal tax on antebellum US cotton exports


  • Irwin, Douglas A.


The United States produced about 80 percent of the world's cotton in the decades prior to the Civil War. How much monopoly power did the United States possess in the world cotton market and what would have been the effect of an optimal export tax? This paper estimates the elasticity of foreign demand for U.S. cotton exports and uses the elasticity in a simple partial equilibrium model to calculate the optimal export tax and its effect on prices, trade, and welfare. The results indicate that the export demand elasticity for U.S. cotton was about -1.7 and that the optimal export tax of about 50 percent would have raised U.S. welfare by about $6 million, about 0.1 percent of U.S. GDP or about 0.5 percent of the South's GDP.
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Suggested Citation

  • Irwin, Douglas A., 2003. "The optimal tax on antebellum US cotton exports," Journal of International Economics, Elsevier, vol. 60(2), pages 275-291, August.
  • Handle: RePEc:eee:inecon:v:60:y:2003:i:2:p:275-291

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    References listed on IDEAS

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    9. James, John A., 1978. "The welfare effects of the antebellum tariff: A general equilibrium analysis," Explorations in Economic History, Elsevier, vol. 15(3), pages 231-256, July.
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    Cited by:

    1. Marc Weidenmier, 2004. "Gunboats, Reputation, and Sovereign Repayment: Lessons from the Southern Confederacy," NBER Working Papers 10960, National Bureau of Economic Research, Inc.
    2. Waschik, Robert & Fraser, Iain, 2007. "A computable general equilibrium analysis of export taxes in the Australian wool industry," Economic Modelling, Elsevier, vol. 24(4), pages 712-736, July.
    3. Allen, Robert C., 2014. "American Exceptionalism as a Problem in Global History," The Journal of Economic History, Cambridge University Press, vol. 74(02), pages 309-350, June.
    4. Marcelo de Paiva Abreu & Felipe Tamega Fernandes, 2005. "Market Power and Commodity Prices: Brazil, Chile and the United States, 1820s-1930," Textos para discussão 511, Department of Economics PUC-Rio (Brazil).
    5. Marc D. Weidenmier & Kim Oosterlinck, 2007. "Victory or Repudiation? The Probability of the Southern Confederacy Winning the Civil War," NBER Working Papers 13567, National Bureau of Economic Research, Inc.
    6. Weidenmier, Marc D., 2005. "Gunboats, reputation, and sovereign repayment: lessons from the Southern Confederacy," Journal of International Economics, Elsevier, vol. 66(2), pages 407-422, July.
    7. León, Sonia M. & Roitman, Mauricio E. & Romero, Carlos A., 2009. "Evaluación de los efectos de la remoción de medidas para-arancelarias sobre las exportaciones argentinas de productos textiles
      [Assessing the efects of eliminating non-tariff barriers over the Arge
      ," MPRA Paper 17898, University Library of Munich, Germany.
    8. Burger, Kees, 2008. "Optimal export taxes – the case of cocoa in Cote d'Ivoire," 107th Seminar, January 30-February 1, 2008, Sevilla, Spain 6395, European Association of Agricultural Economists.
    9. Joseph Davis & Vanguard Group; Christopher Hanes, 2004. "Primary Sector Shocks and Early American Industrialization," 2004 Meeting Papers 154, Society for Economic Dynamics.
    10. Steinwender, Claudia, 2014. "Information frictions and the law of one price: "When the States and the Kingdom became United"," WTO Staff Working Papers ERSD-2014-12, World Trade Organization (WTO), Economic Research and Statistics Division.

    More about this item

    JEL classification:

    • F1 - International Economics - - Trade
    • N3 - Economic History - - Labor and Consumers, Demography, Education, Health, Welfare, Income, Wealth, Religion, and Philanthropy


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