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Potential Pareto-improving Move towards Most Favored Nation Tariffs

Author

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  • Lahiri Sajal

    () (Southern Illinois University)

  • Peri Silva

    () (Kansas State University and Centro Studi Luca d\'Agliano)

Abstract

We use a multi-country asymmetric oligopolistic framework for segmented markets to study the welfare effects of reducing tariff discriminations - which we call a move towards Most Favored Nation tariffs. Both unilateral and multilateral reforms are considered. We investigate this issue under different scenarios such as when initial tariffs are arbitrary and when they are optimal. Conditions under which such harmonizations are potentially Paretoimproving are derived. We also analyze the effects on individual countries.

Suggested Citation

  • Lahiri Sajal & Peri Silva, 2013. "Potential Pareto-improving Move towards Most Favored Nation Tariffs," Development Working Papers 348, Centro Studi Luca d'Agliano, University of Milano, revised 24 Apr 2013.
  • Handle: RePEc:csl:devewp:348
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    References listed on IDEAS

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    More about this item

    Keywords

    Tari reform; MFN; Welfare; Asymmetric Oligopoly;

    JEL classification:

    • F10 - International Economics - - Trade - - - General
    • F11 - International Economics - - Trade - - - Neoclassical Models of Trade
    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations

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