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Should We Tax Trade? A Pigouvian Perspective

Author

Listed:
  • Arnaud Costinot
  • Iván Werning

Abstract

We develop a simple and intuitive Pigouvian perspective on optimal trade policy. Our approach unifies a wide range of rationales for taxing trade, from the classical optimal tariff argument to contemporary debates about global carbon emissions and geopolitics. We also clarify when trade policy intervention is warranted and when alternative domestic instruments should be used instead.

Suggested Citation

  • Arnaud Costinot & Iván Werning, 2026. "Should We Tax Trade? A Pigouvian Perspective," NBER Working Papers 35461, National Bureau of Economic Research, Inc.
    • Handle: RePEc:nbr:nberwo:35461
    Note: ITI
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    More about this item

    JEL classification:

    • F10 - International Economics - - Trade - - - General
    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations

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