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Tariff Reform in the Presence of Sector-Specific Distortions

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  • Beghin, John C.
  • Karp, L.

Abstract

The problem of choosing second-best trade policies is modified by including sector-policies as well as tariffs. Formulae for the optimal tariff and sector-specific subsidy are derived and used to study the design of optimal policy menus. The theory is applied to a computable general equilibrium model of the U.S. economy which emphasizes agriculture. The model suggests that non-agricultural distortions do not provide a second-best argument for substantial levels of agricultural protection.

Suggested Citation

  • Beghin, John C. & Karp, L., 1992. "Tariff Reform in the Presence of Sector-Specific Distortions," Staff General Research Papers Archive 1581, Iowa State University, Department of Economics.
    • Handle: RePEc:isu:genres:1581
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    Cited by:

    1. Karp, Larry, 1997. "A Neoclassical View of Trade Liberalization," Department of Agricultural & Resource Economics, UC Berkeley, Working Paper Series qt13f2q378, Department of Agricultural & Resource Economics, UC Berkeley.
    2. Karp, Larry, 1997. "A Neoclassical View of Trade Liberalization," Department of Agricultural & Resource Economics, UC Berkeley, Working Paper Series qt13f2q378, Department of Agricultural & Resource Economics, UC Berkeley.

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