IDEAS home Printed from https://ideas.repec.org/a/eut/journl/v10y2005i1p105.html

An Empirical & Theoretical Study about the Effects of Tariff on Economic Growth

Author

Listed:
  • Alireza Rahimi-Boroujerdi

    (Associate Professor of Economics, University of Tehran)

Abstract

One of the methods for studying the relation between economic growth and international trade is considering the effects of tariff on economic growth. The neo-classical economists believe that free trade not only has significant benefits for every country but for all in the world, therefore, they are seeking for laterally and multi-conceptual omission of trade restrictions and advise on the countries with taking into consideration of specialization to do their best in production and international division of labor with little interferences of government in international trade. In this paper and in order to show the effects of tariffs on economic growth, at first we maximize the household utility function in a neo-classical model. The period of our study is from 1961 up to 1998 lunar. The effects of tariff on economic growth have been considered in two different scenarios. In the first scenario, we assume that exogenous technological progress rate is equal to 2% and depreciation exchange rate is equal to 10%. In the second scenario, the exogenous technological progress rate is 2% and depreciation rate is 5%. The results of both confirm that any trade restrictions may result to a reduction in economic growth rate. In this manner, the effect of tariff rate on economic growth in post- revolution period in comparison with pre-revolution one has decreased due to the result of reduction in degree of openness and reduction of population growth rate. On the other hand, any lower depreciation rate may have a negative effect on economic growth

Suggested Citation

  • Alireza Rahimi-Boroujerdi, 2005. "An Empirical & Theoretical Study about the Effects of Tariff on Economic Growth," Iranian Economic Review (IER), Faculty of Economics,University of Tehran.Tehran,Iran, vol. 10(1), pages 105-133, spring.
    • Handle: RePEc:eut:journl:v:10:y:2005:i:1:p:105
    as

    Download full text from publisher

    File URL: ftp://80.66.179.253/eut/journl/6-rahimi-broujerd.pdf
    Download Restriction: no
    File URL:
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Edwards, Sebastian, 1989. "Openness, outward orientation, trade liberalization, and economic performance in developing countries," Policy Research Working Paper Series 191, The World Bank.
    2. Harrison, Ann, 1996. "Openness and growth: A time-series, cross-country analysis for developing countries," Journal of Development Economics, Elsevier, vol. 48(2), pages 419-447, March.
    3. J. de V. Graaff, 1949. "On Optimum Tariff Structures," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 17(1), pages 47-59.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Dan He & Zhiqiong Zhang & Minglong Han & Yizhi Kang & Peng Gao, 2022. "Multi-dimensional boundary effects and regional economic integration: Evidence from the Yangtze River Economic Belt," International Regional Science Review, , vol. 45(4), pages 472-498, July.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Judith Dean, 1995. "From protectionism to free trade fever? Recent reforms in developing countries," Open Economies Review, Springer, vol. 6(4), pages 369-385, October.
    2. Timothy J. Kehoe & Kim J. Ruhl, 2010. "Why Have Economic Reforms in Mexico Not Generated Growth?," Journal of Economic Literature, American Economic Association, vol. 48(4), pages 1005-1027, December.
    3. María Soledad Feal Zubimendi, 2008. "Crecimiento económico y apertura comercial: análisis de la influencia de los canales," Estudios Economicos, Universidad Nacional del Sur, Departamento de Economia, vol. 25(50), pages 37-73, January-j.
    4. Blanco, Luisa & Grier, Robin, 2012. "Natural resource dependence and the accumulation of physical and human capital in Latin America," Resources Policy, Elsevier, vol. 37(3), pages 281-295.
    5. Kanta Marwah & Akbar Tavakoli, 2004. "The Effect of Foreign Capital and Imports on Economic Growth: Further Evidence from Four Asian Countries," Carleton Economic Papers 04-02, Carleton University, Department of Economics.
    6. Renuka Mahadevan, 2002. "Trade liberalization and productivity growth in Australian manufacturing industries," Atlantic Economic Journal, Springer;International Atlantic Economic Society, vol. 30(2), pages 170-185, June.
    7. Felina B. Duncan & Zulal S. Denaux, 2013. "Determinants Of Economic Success In The Middle East And North Africa," Global Journal of Business Research, The Institute for Business and Finance Research, vol. 7(5), pages 25-34.
    8. Miley, Jose, 2015. "Subjective inclusive development in developing countries: An analysis of contributing factors," MPRA Paper 66618, University Library of Munich, Germany.
    9. Måns Söderbom & Francis Teal, 2003. "Openness and human capital as sources of productivity growth: An empirical investigation," CSAE Working Paper Series 2003-06, Centre for the Study of African Economies, University of Oxford.
    10. Chebli Mongi & Kais Saidi, 2024. "The Impact of Corruption, Government Effectiveness, FDI, and GFC on Economic Growth: New Evidence from Global Panel of 48 Middle-Income Countries," Journal of the Knowledge Economy, Springer;Portland International Center for Management of Engineering and Technology (PICMET), vol. 15(3), pages 10696-10721, September.
    11. Eleanor Doyle & Inmaculada Martínez-Zarzoso, 2006. "Relating Productivity and Trade 1980-2000: A Chicken and Egg Analysis," Ibero America Institute for Econ. Research (IAI) Discussion Papers 147, Ibero-America Institute for Economic Research.
    12. Gries, Thomas & Kraft, Manfred & Meierrieks, Daniel, 2009. "Linkages Between Financial Deepening, Trade Openness, and Economic Development: Causality Evidence from Sub-Saharan Africa," World Development, Elsevier, vol. 37(12), pages 1849-1860, December.
    13. Sarath Delpachitra & Pham Van Dai, 2012. "The Determinants of TFP Growth in Middle Income Economies in ASEAN: Implication of Financial Crises," International Journal of Business and Economics, School of Management Development, Feng Chia University, Taichung, Taiwan, vol. 11(1), pages 63-88, June.
    14. Wessel, Jan, 2019. "Evaluating the transport-mode-specific trade effects of different transport infrastructure types," Transport Policy, Elsevier, vol. 78(C), pages 42-57.
    15. Burçak Polat & Antonio Rodríguez Andrés, 2017. "Trade openness, labour market rigidity and economic growth: A dynamic panel data analysis," The Economic and Labour Relations Review, , vol. 28(4), pages 555-564, December.
    16. An, Galina & Iyigun, Murat F., 2004. "The export skill content, learning by exporting and economic growth," Economics Letters, Elsevier, vol. 84(1), pages 29-34, July.
    17. Kazuhiko Yokota & Akinori Tomohara, 2009. "Extending the Learning-By-Exporting Hypothesis: Introducing a Credit Constraint," International Advances in Economic Research, Springer;International Atlantic Economic Society, vol. 15(2), pages 169-177, May.
    18. Chiara Binelli, 2008. "Returns to Education and Increasing Wage Inequality in Latin America," Working Paper series 30_08, Rimini Centre for Economic Analysis.
    19. Mastromarco, Camilla & Ghosh, Sucharita, 2009. "Foreign Capital, Human Capital, and Efficiency: A Stochastic Frontier Analysis for Developing Countries," World Development, Elsevier, vol. 37(2), pages 489-502, February.
    20. Rachel Griffith & Stephen Redding & John Van Reenen, 2004. "Mapping the Two Faces of R&D: Productivity Growth in a Panel of OECD Industries," The Review of Economics and Statistics, MIT Press, vol. 86(4), pages 883-895, November.

    More about this item

    Keywords

    ;
    ;
    ;
    ;
    ;
    ;
    ;

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eut:journl:v:10:y:2005:i:1:p:105. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: [z.rahimalipour] (email available below). General contact details of provider: https://edirc.repec.org/data/fecutir.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.