Uniform tariffs have become increasingly popular in recent years, yet their economic rationale is not strong. We identify and evaluate three sets of reasons as to why governments may prefer tariff uniformity as a means of alleviating political motives for excessive protection. First, a...

This paper analyzes the impact of a tariff on sectoral adjustments in an economy which produces two traded consumption goods, one of which is exported, and a non-traded investment good. The importance of sectoral capital intensities is emphasized. In particular, the qualitative dynamic...

This paper rehabilitates the concept of effective rate of protection for use in political economy. The usual definition corresponds to no economically interesting magnitude in general equilibrium. The effective rate of protection for a sector is redefined here as the uniform tariff which is...

In the century after the Civil War, roughly two-thirds of U.S. dutiable imports were subject to specific duties whose ad valorem equivalent was inversely related to the price level. This paper finds that import price fluctuations easily dominate commercial policies (changes in rates of import...

Under GATT, countries are allowed to impose countervailing duties to offset foreign subsidies. However GATT rules limit the amount of duty to the amount of the subsidy. This paper examines a generalized model of imperfect competition with capital subsidies and shows the conditions under which a...

The theoretical debate over whether countries can and should set tariffs in response to the foreign export elasticities they face goes back to Edgeworth (1894). Despite the centrality of the optimal tariff argument in trade policy, there exists no evidence about whether countries actually...

National governments have incentives to intervene in international markets, particularly in encouraging export cartels and in imposing tariffs on imports from imperfectly competitive foreign firms. Although the optimal response to foreign monopoly is usually a tariff, a specific subsidy will be...

This paper analyzes some aspects of the effects of trade restrictions (such as tariffs, quotas and quality controls) and their desirability when the quantity of the imported good is endogenous, and the foreign producer is a monopolist. It uses a fairly general model based on the work of Spence...

This paper examines the optimal labor contract in a small open economy with incomplete markets under international price uncertainty. The effect on employment, wages, and profits of different realizations of the state of nature is studied and agents' preferences concerning the implementation of...

Using a standard complete specialization model of a small open economy within a rigorous intertemporal optimization framework with contract- based wage rigidity, we show that permanent tariffs may lead to a current account deterioration and a fall in employment, contradicting most of the...