Trade Reform Diagnostics with Many Households, Quotas, and Tariffs
The desirability of trade reform paired with revenue neutral changes in other distortionary taxes is an empirical question. With a particular Computable General Equilibrium model of an economy, particular reforms can be evaluated, but the robustness of conclusions is suspect; they depend on a particular specification and parameterization of the model economy. This paper provides a diagnostic toolkit which permits sensitivity analysis across model specifications and parameterizations. Novel elements are an emphasis on the concept of compensated Marginal Cost of Funds (MCF), development of the MCF of quotas and analysis of the relationship between aggregate MCF and social welfare.
|Date of creation:||05 Feb 1999|
|Date of revision:||03 May 2000|
|Publication status:||published, Review of International Economics, 2002, 10, 215-36|
|Contact details of provider:|| Postal: Boston College, 140 Commonwealth Avenue, Chestnut Hill MA 02467 USA|
Web page: http://fmwww.bc.edu/EC/
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