This paper introduces the concept of a steepest ascent tariff reform for a small open economy. By construction, it is locally optimal in that it yields the highest gain in utility of any feasible tariff reform vector of the same length. Accordingly, it provides a convenient benchmark for the...

The paper analyzes environmental tax policy reform using a competitive model of world trade that includes production-generated environmental damage (pollution) and trade tariffs. The authors examine the feasibility of Pareto-improving multilateral reforms of environmental taxes, and show that...