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Tariff Reform in a Small Open Multi-household Economy with Domestic Distortions and Nontraded Goods

Author

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  • Diewert, W E
  • Turunen-Red, A H
  • Woodland, A D

Abstract

The authors examine tariff reforms in the context of a small open economy and simultaneously deal with three extensions of the current literature: nonremovable domestic tax distortions, nontraded goods, and many households. Using the new concepts of a constant-utility, tax-adjusted, balance-of-trade function and a constant-utility productivity improvement in tariffs, necessary and sufficient conditions for the existence of strict Pareto improving tariff and transfer reforms are established. The authors also consider directional tariff and transfer reforms such as movements toward the world price vector, proportional reductions, and reductions of extreme tariffs. Also discussed is the role of normality of household preferences. Copyright 1991 by Economics Department of the University of Pennsylvania and the Osaka University Institute of Social and Economic Research Association.

Suggested Citation

  • Diewert, W E & Turunen-Red, A H & Woodland, A D, 1991. "Tariff Reform in a Small Open Multi-household Economy with Domestic Distortions and Nontraded Goods," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 32(4), pages 937-957, November.
    • Handle: RePEc:ier:iecrev:v:32:y:1991:i:4:p:937-57
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    Cited by:

    1. Harris, Richard G. & Schmitt, Nicolas, 2001. "Strategic export policy with foreign direct investment and import substitution," Journal of Development Economics, Elsevier, vol. 64(1), pages 293-312, February.
    2. Raimondos, Pascalis & Kreickemeier, Udo, 2006. "Concertina Reforms with International Capital Mobility," CEPR Discussion Papers 5888, C.E.P.R. Discussion Papers.
    3. Raimondos, Pascalis & Woodland, Alan, 2018. "Reciprocity in trade negotiations and welfare," Journal of International Economics, Elsevier, vol. 111(C), pages 134-142.
    4. Akihito Asano & Michiru Sakane, 2024. "The welfare effects of partial tariff reduction in Japan," Japanese Economy, Taylor & Francis Journals, vol. 50(2), pages 229-252, April.
    5. Rod Falvey, 1994. "Revenue enhancing tariff reform," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 130(1), pages 175-190, March.
    6. Pascalis Raimondos-Møller & Alan Woodland, 2014. "Steepest ascent tariff reform," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 55(1), pages 69-99, January.
    7. Kreickemeier, Udo & Raimondos-Møller, Pascalis, 2008. "Tari[ff]-tax reforms and market access," Journal of Development Economics, Elsevier, vol. 87(1), pages 85-91, August.
    8. Diewert, W. Erwin & Fox, Kevin J., 2016. "Kevin J. Fox Interview of W. Erwin Diewert," Microeconomics.ca working papers erwin_diewert-2016-6, Vancouver School of Economics, revised 02 Jun 2016.
    9. Raimondos-Moller, Pascalis & Woodland, Alan D., 2006. "Non-preferential trading clubs," Journal of International Economics, Elsevier, vol. 68(1), pages 79-91, January.
    10. SAITO Katsuhiro & SAITO Konomi, 2010. "Piecemeal Trade Liberalization on Agriculture - Theoretical and AGE based Simulation Analysis," EcoMod2003 330700130, EcoMod.
    11. W D A Bryant, 2009. "General Equilibrium:Theory and Evidence," World Scientific Books, World Scientific Publishing Co. Pte. Ltd., number 6875, October.
    12. Pascalis Raimondos & Alan D. Woodland, 2011. "Reciprocity, World Prices and Welfare," CESifo Working Paper Series 3607, CESifo.
    13. Paul Oslington, 2012. "General Equilibrium: Theory and Evidence," The Economic Record, The Economic Society of Australia, vol. 88(282), pages 446-448, September.
    14. Akihito Asano & Michiru S Kosaka, 2017. "The welfare effects of a partial tariff reduction under domestic distortion in Japan," ANU Working Papers in Economics and Econometrics 2017-650, Australian National University, College of Business and Economics, School of Economics.

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