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Asymmetric model of neoclassical trade and optimum tax-subsidy-tariff policy

Author

Listed:
  • Ghosh, Dilip K.
  • Arize, Augustine C.
  • Zaher, Angie

Abstract

This work constructs an asymmetric structure of neoclassical model of trade, and reexamines the theorems of trade, which were derived originally in 2 × 2 × 2 paradigm. Absence of non-traded sector, noted by Bhagwati, has been highlighted in a more serious fashion. Then optimum price distortions in the form of taxes, subsidies, and tariffs are introduced, and optimality of the price distortions is ascertained.

Suggested Citation

  • Ghosh, Dilip K. & Arize, Augustine C. & Zaher, Angie, 2017. "Asymmetric model of neoclassical trade and optimum tax-subsidy-tariff policy," The Journal of Economic Asymmetries, Elsevier, vol. 16(C), pages 87-100.
    • Handle: RePEc:eee:joecas:v:16:y:2017:i:c:p:87-100
    DOI: 10.1016/j.jeca.2017.09.001
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    References listed on IDEAS

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    1. Dilip K. Ghosh, 1980. "The Non‐traded Sector, Tariff Distortion and Immiserizing Growth," The Economic Record, The Economic Society of Australia, vol. 56(154), pages 257-260, September.
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    6. Batra, Raveendra N, 1973. "Nontraded Goods, Factor Market Distortions, and the Gains from Trade," American Economic Review, American Economic Association, vol. 63(4), pages 706-713, September.
    7. Arnold Harberger, 1964. "Taxation, Resource Allocation, and Welfare," NBER Chapters, in: The Role of Direct and Indirect Taxes in the Federal Reserve System, pages 25-80, National Bureau of Economic Research, Inc.
    8. Sunanda Sen, 2010. "International Trade Theory and Policy: A Review of the Literature," Economics Working Paper Archive wp_635, Levy Economics Institute.
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    10. Wolfgang F. Stolper & Paul A. Samuelson, 1941. "Protection and Real Wages," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 9(1), pages 58-73.
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