Tariff wars in the Ricardian Model with a continuum of goods

• 成果类型: Article
• 署名作者: Opp, Marcus M.
• 署名单位: University of California System; University of California Berkeley
• 刊物名称: JOURNAL OF INTERNATIONAL ECONOMICS
• ISSN/ISSBN: 0022-1996
• DOI: 10.1016/j.jinteco.2009.11.001
• 发表日期: 2010
• 页码: 212-225
• 关键词: Optimum tariff rates; Ricardian trade models; WTO; gains from trade

摘要

This paper describes strategic tariff choices within the Ricardian framework of Dornbusch, Fischer, and Samuelson (1977) using CES preferences The optimum tariff schedule is uniform across goods and inversely related to the import demand elasticity of the other country In the Nash equilibrium of tariffs, larger economies apply higher tariff rates Productivity adjusted relative size (approximate to GDP ratio) is a sufficient statistic for absolute productivity advantage and the size of the labor force Both countries apply higher tariff rates if specialization gains from comparative advantage are high and transportation cost is low A sufficiently large economy prefers the inefficient Nash equilibrium in tariffs over free trade due to its quasi-monopolistic power on world markets. The required threshold size is increasing in comparative advantage and decreasing in transportation cost I discuss the implications of the static Nash-equilibrium analysis for the sustainability and structure of trade agreements (C) 2009 Elsevier B V All rights reserved