"Stochastic trade policy with asset markets. The role of tariff structu" by Mahua Barari and Harvey E. Lapan
 

Title

Stochastic trade policy with asset markets. The role of tariff structure

Abstract

This paper uses a Stockman-Dellas type two-country, two-good, stochastic general equilibrium model to consider the effects of commercial policy when asset markets are complete. We show that: (i) import and export tariffs do not have symmetric effects because interstate relative prices depend on the entire tariff structure; (ii) when commercial policy is random and exogenously determined, the ex post comparison of utility across states depends upon whether import or export tariffs are used; and (iii) when endowments are random, implying the optimal tariff varies across states, the introduction of asset markets may be welfare-reducing when only import tariffs are used. © 1993.

Department(s)

Economics

Document Type

Article

DOI

https://doi.org/10.1016/0022-1996(93)90022-P

Publication Date

1-1-1993

Journal Title

Journal of International Economics

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