Optimal tariffs when production is fixed
The effects of tariff wars on welfare are analyzed for the case of trade between two countries with fixed outputs of the traded good. Assuming mild conditions, it is shown that if there are non-zero tariffs for which welfare-maximizing equilibrium holds, then free trade is not strictly preferable when the countries' output are equal, and if there are not equal is strictly disadvantageous to the country with the smaller output. It is also shown that welfare-maximizing equilibria do exist if the demand function is linear.
|Date of creation:||1998|
|Contact details of provider:|| Postal: Chalé dos Catedráticos, 1. Avda. das Ciencias s/n. Campus Vida, 15782 Santiago de Compostela|
Phone: 981 59 11 66
Fax: 981 59 99 35
Web page: http://www.usc.es/idega/
More information through EDIRC
When requesting a correction, please mention this item's handle: RePEc:edg:anecon:0005. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Manuel Fernandez Grela)
If references are entirely missing, you can add them using this form.