Title: Tit-For-Tat, Tariffs, and Time: A dynamic model of trade policy
Abstract:The objective of this study is to examine the impact of a global protectionist response to a small country's tariff setting behavior. It is assumed that the small country's government seeks to maximiz...The objective of this study is to examine the impact of a global protectionist response to a small country's tariff setting behavior. It is assumed that the small country's government seeks to maximize tariff revenues for the purpose of generating funds that can be used to subsidize an interest group in return for its political support. The main result is that if a small country were to seek to raise revenues from a tariff in an environment initially characterized by free trade, while it might be optimal for the country to levy a positive tariff initially, a “tit-for-tat” type response by trading partners would drive tariff levels down over time.Read More
Publication Year: 1989
Publication Date: 1989-12-01
Language: en
Type: article
Indexed In: ['crossref']
Access and Citation
Cited By Count: 4
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