Optimum tariffs and retaliation: How country numbers matter

• 成果类型: Article
• 署名作者: Zissimos, Ben
• 署名单位: Vanderbilt University
• 刊物名称: JOURNAL OF INTERNATIONAL ECONOMICS
• ISSN/ISSBN: 0022-1996
• DOI: 10.1016/j.jinteco.2009.04.003
• 发表日期: 2009
• 页码: 276-286
• 关键词: Comparative statics; EFFICIENCY; North-South; Tariff war; Terms of trade

摘要

This paper identifies a new terms-of-trade externality that is exercised through tariff setting. A North-South model of international trade is introduced in which the number of countries in each region can be varied. As the number of countries in one region is increased, each government there competes more aggressively with the others in its region, by lowering its tariff, to attract imports from the other region. In doing so, all countries in a region exert a negative terms-of-trade externality on each other, collectively undermining their own terms of trade and welfare. This externality can increase efficiency if the numbers of countries in both regions are increased simultaneously. (C) 2009 Elsevier B.V. All rights reserved.