Income distribution and the contractionary effect of protection: A theoretical analysis

In terms of a simple model we show that removal of tariff from a competing foreign brand is likely to expand the size of the domestic industry when income disparities exist. A tariff increases profits of the local monopolist but is capable of cutting down the size of the local industry. After providing the general theoretical condition, we construct an example (from a class of examples) where such an outcome holds in equilibrium.

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Year of publication:	1992
Authors:	Marjit, Sugata ; Kabiraj, Tarun
Publisher:	Konstanz : Universität Konstanz, Sonderforschungsbereich 178 - Internationalisierung der Wirtschaft

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Series:	Diskussionsbeiträge - Serie II ; 182
Type of publication:	Book / Working Paper
Type of publication (narrower categories):	Working Paper
Language:	English
Other identifiers:	756468248 [GVK] hdl:10419/101541 [Handle] RePEc:zbw:kondp2:182 [RePEc]
Source:	EconStor

Persistent link: https://www.econbiz.de/10010397966