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Strategic choice of trade policy instruments


  • Valentin Melnik



What is the optimum mix of trade policy instruments? Usually governments choose among such instruments as quotas, tariffs, explicit or implicit subsidies. The goal of the project is to consider the possibility of a simultaneous use by the government of quotas (and corresponding license fees) and tariffs. The combined use of quotas and tariffs is better — from the efficiency point of view — than a policy based on simple quotas or simple tariffs. The qualitative outcomes of the analysis depend on the type of government behavior (revenue or public welfare maximization), and market structure. The study aims at improving our understanding of the link between government intervention — the optimal mix of trade policy instruments — and competition in the home goods market.

Suggested Citation

  • Valentin Melnik, 2003. "Strategic choice of trade policy instruments," EERC Working Paper Series 01-250e, EERC Research Network, Russia and CIS.
  • Handle: RePEc:eer:wpalle:01-250e

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    References listed on IDEAS

    1. Wilson, John Douglas, 1999. "Theories of Tax Competition," National Tax Journal, National Tax Association, vol. 52(2), pages 269-304, June.
    2. Zodrow, George R. & Mieszkowski, Peter, 1986. "Pigou, Tiebout, property taxation, and the underprovision of local public goods," Journal of Urban Economics, Elsevier, vol. 19(3), pages 356-370, May.
    3. Charles M. Tiebout, 1956. "A Pure Theory of Local Expenditures," Journal of Political Economy, University of Chicago Press, vol. 64, pages 416-416.
    4. Varian, Hal R, 1985. "Price Discrimination and Social Welfare," American Economic Review, American Economic Association, vol. 75(4), pages 870-875, September.
    5. Wilson, John Douglas, 1999. "Theories of Tax Competition," National Tax Journal, National Tax Association, vol. 52(n. 2), pages 269-304, June.
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    JEL classification:

    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
    • D43 - Microeconomics - - Market Structure, Pricing, and Design - - - Oligopoly and Other Forms of Market Imperfection
    • F12 - International Economics - - Trade - - - Models of Trade with Imperfect Competition and Scale Economies; Fragmentation
    • L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets
    • F00 - International Economics - - General - - - General

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