Pareto ranking optimal tariffs under foreign monopoly

2002

SSRN Journal

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“…This is in line with findings that e.g. Lookwood and Wong (2000) and Kowalczyk and Skeath (1994) have made in very different settings.…”

Section: T F =supporting

confidence: 92%

Section: Introductionmentioning

confidence: 99%

Effects of Tariffication: Tariffs, Quotas and VERs under Monopolistic Competition

2002

SSRN Journal

“…9 This is in line with findings that e.g Lockwood and Wong (2000). andKowalczyk and Skeath (1994) have made in settings of monopoly and oligopoly; on this see alsoSchröder (2004) andJørgensen and Schröder (2005).…”

supporting

confidence: 76%

“…There are, however, a number of contributions that relate to the present work. Kowalczyk and Skeath (1994) have shown that in a setting where a country faces a foreign monopolist, ad valorem tariffs are welfare superior to specific tariffs. This result is opposed to our finding and driven by the fact that the ad valorem tariff is superior in terms of revenue extraction.…”

Section: Introductionmentioning

confidence: 99%

Effects of Tariffication: Tariffs and Quotas under Monopolistic Competition

2007

Open Econ Rev

Recent rounds of GATT and later WTO have advocated widespread tariffication, meaning that existing non-tariff barriers be converted into import equivalent tariffs. From an economic point of view, the effects of such tariffication are not entirely clear. The paper presents a trade model with monopolistic competition to examine the welfare effects of tariffication. The ranking of pre- and post-tariffication welfare crucially depends on the nature of the initial trade barrier and the tariff tool applied. Tariffication using a specific (ad valorem) tariff results in the same (reduced) welfare level compared to an initial sold quota, whereas welfare is increased (the same) compared to an initial shared quota. Copyright Springer Science+Business Media, LLC 2007Trade policy, Tariffication, Specific tariff, Ad valorem tariff, Quota, Tariff rate quotas, VER, F02, F12, F13,

“…It is well known that in perfectly competitive industries and small country settings, specific and ad valorem tariffs are identical policy instruments. In an imperfectly competitive setting, however, where a country faces a foreign monopoly or oligopoly, an ad valorem tariff is typically preferable to a specific tariff (see, e.g., Kowalczyk and Skeath 1994; Skeath and Trandel 1994a; and Delipalla and Keen 1992). For industries featuring monopolistic competition, we find that a specific tariff generates higher welfare than an ad valorem tariff.…”

Section: Introductionmentioning

confidence: 99%

Welfare‐ranking ad valorem and specific tariffs under monopolistic competition

Canadian J of Economics

2005

Actual trade and tariff policy prefers ad valorem tariffs to specific tariffs. Yet in this paper we show that, in a setting of monopolistic competition, realizing a given restriction on imports via a specific tariff would generate more consumer utility than obtaining the same restriction via an ad valorem tariff. JEL classification: F12Un classement en terme de bien-eˆtre des droits de douane ad valorem et spe´cifiques quand on est en re´gime de concurrence monopolistique. Les politiques commerciales en vigueur pre´fe`rent les droits de douane ad valorem aux droits de douane spe´cifiques. Or ce me´moire montre que, dans un contexte de concurrence monopolistique, re´duire les importations par le truchement d'un droit de douane spe´cifique ge´ne`re plus d'utiliteṕ our le consommateur que les meˆmes restrictions obtenues par le truchement d'un droit de douane ad valorem.