A second-best argument for low optimal tariffs on intermediate inputs

• 成果类型: Article
• 署名作者: Caliendo, Lorenzo; Feenstra, Robert C.; Romalis, John; Taylor, Alan M.
• 署名单位: Yale University; National Bureau of Economic Research; University of California System; University of California Davis; Macquarie University; Centre for Economic Policy Research - UK
• 刊物名称: JOURNAL OF INTERNATIONAL ECONOMICS
• ISSN/ISSBN: 0022-1996
• DOI: 10.1016/j.jinteco.2023.103824
• 发表日期: 2023
• 关键词: Trade policy; monopolistic competition; gains from trade; Input-output linkages

摘要

We derive a new formula for the optimal uniform tariff in a small-country, heterogeneous firm model with roundabout production and a nontraded good. Tariffs are applied on imported intermediate inputs. First-best policy requires that markups on domestic intermediate inputs are offset by subsidies. In a second-best setting where such subsidies are not used, roundabout production and the monopoly distortion in the traded sector create strong incentives to lower the optimal tariff on imported inputs. In a quantitative version of our two-sector small open economy, we find that the optimal tariff is lowered under nearly all parameter values considered, and can be negative.