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Tariff Rebate on Intermediate Inputs for Exportables in a Two-Period Model with Learning-from-Exporting

In: International Trade, Resource Mobility and Adjustments in a Changing World

Author

Listed:
  • Saqib Jafarey

    (City University)

  • Sajal Lahiri

    (Southern Illinois University Carbondale)

Abstract

This paper develops a two-period, perfectly competitive model of international trade of a small open economy with the following features. The country is a net importer of an intermediate input, and there is an import tariff on this good in period 1. The exporting firms that use this intermediate input receive a rebate on its imports in period 1. There are transaction costs of exports in both periods. However, the transaction cost in period 2 is a decreasing function of the amount of exports made in period 1, implying some degree of learning-from-doing in exports. Net tax revenue is used to provide a public good. In this framework, we determine and characterise, inter alia, the optimal level of rebate given to the exporting sector on tariffs paid on imported intermediate inputs.

Suggested Citation

  • Saqib Jafarey & Sajal Lahiri, 2024. "Tariff Rebate on Intermediate Inputs for Exportables in a Two-Period Model with Learning-from-Exporting," Contributions to Economics, in: Sugata Marjit & Biswajit Mandal (ed.), International Trade, Resource Mobility and Adjustments in a Changing World, chapter 0, pages 21-32, Springer.
    • Handle: RePEc:spr:conchp:978-981-97-5652-0_2
    DOI: 10.1007/978-981-97-5652-0_2
    as

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