IDEAS home Printed from https://ideas.repec.org/p/duk/dukeec/97-18.html
   My bibliography  Save this paper

The Effects of Import Quotas on National Welfare: Comment

Author

Listed:
  • Tower, Ed
  • Gokcekus, Omer

Abstract

Recently in the Southern Economic Journal Palivos and Yip marry real and monetary analysis to provide an intriguing new argument for protection. Is this an idea which international agencies like the World Trade Organization and the World Bank should educate their member countries about? The authors consider an economy with differential cash-in-advance constraints, fiat money, and no interest payments on cash. They argue that the first best policy in such an economy is differential consumption taxes, and if the exportable is cash intensive a second best policy is an import quota. In this Comment we argue that paying interest on cash (or equivalently deflating the economy) is better than differential taxation because it is administratively simpler and cheaper; for variants of the model it is welfare superior; and it is less susceptible to manipulation by rent seekers.

Suggested Citation

  • Tower, Ed & Gokcekus, Omer, 1997. "The Effects of Import Quotas on National Welfare: Comment," Working Papers 97-18, Duke University, Department of Economics.
    • Handle: RePEc:duk:dukeec:97-18
    as

    Download full text from publisher

    To our knowledge, this item is not available for download. To find whether it is available, there are three options:
    1. Check below whether another version of this item is available online.
    2. Check on the provider's web page whether it is in fact available.
    3. Perform a search for a similarly titled item that would be available.

    Other versions of this item:

    References listed on IDEAS

    as
    1. Bhagwati, Jagdish N & Srinivasan, T N, 1981. "The Evaluation of Projects at World Prices under Trade Distortions: Quantitative Restrictions, Monopoly Power in Trade and Nontraded Goods," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 22(2), pages 385-399, June.
    2. Kimbrough, Kent P., 1986. "The optimum quantity of money rule in the theory of public finance," Journal of Monetary Economics, Elsevier, vol. 18(3), pages 277-284, November.
    3. Shahid Alam, M., 1981. "Welfare implications of growth under quotas," Economics Letters, Elsevier, vol. 8(2), pages 177-180.
    4. Theodore Palivos & Chong K. Yip, 1997. "The Gains from Trade for a Monetary Economy Once Again," Canadian Journal of Economics, Canadian Economics Association, vol. 30(1), pages 208-223, February.
    5. Dixit, Avinash, 1985. "Tax policy in open economies," Handbook of Public Economics, in: A. J. Auerbach & M. Feldstein (ed.), Handbook of Public Economics, edition 1, volume 1, chapter 6, pages 313-374, Elsevier.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Theodore Palivos & Chong K. Yip, 1997. "The Effects of Import Quotas on National Welfare: Reply," Southern Economic Journal, John Wiley & Sons, vol. 64(2), pages 588-591, October.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Krishna, Pravin & Panagariya, Arvind, 2000. "A unification of second best results in international trade," Journal of International Economics, Elsevier, vol. 52(2), pages 235-257, December.
    2. Theodore Palivos & Chong K. Yip, 1997. "The Effects of Import Quotas on National Welfare: Reply," Southern Economic Journal, John Wiley & Sons, vol. 64(2), pages 588-591, October.
    3. Beatrix Paal & Bruce D. Smith, 2013. "The sub-optimality of the Friedman rule and the optimum quantity of money," Annals of Economics and Finance, Society for AEF, vol. 14(2), pages 911-948, November.
    4. Casey Rothschild & Florian Scheuer, 2014. "A Theory of Income Taxation under Multidimensional Skill Heterogeneity," NBER Working Papers 19822, National Bureau of Economic Research, Inc.
    5. Liviatan, Nissan & Frish, Roni, 2006. "Interest on reserves and inflation," Journal of Development Economics, Elsevier, vol. 80(1), pages 269-274, June.
    6. Haufler, Andreas, 1994. "Unilateral tax reform under the restricted origin principle," European Journal of Political Economy, Elsevier, vol. 10(3), pages 511-527, October.
    7. Eduardo Giménez & José Martín-Moreno, 2013. "Transmission mechanisms of real stochastic shocks in a small open economy," International Economics and Economic Policy, Springer, vol. 10(2), pages 217-245, June.
    8. J Peter Neary, 2001. "International Trade - Commercial Policy," Working Papers 200123, School of Economics, University College Dublin.
    9. Benjamin Eden, 2009. "The Role of Government in the Credit Market," Vanderbilt University Department of Economics Working Papers 0907, Vanderbilt University Department of Economics.
    10. Eduardo Dávila & Ansgar Walther, 2021. "Corrective Regulation with Imperfect Instruments," NBER Working Papers 29160, National Bureau of Economic Research, Inc.
    11. Ritter Moritz, 2010. "The Optimum Quantity of Money Revisited: Distortionary Taxation in a Search Model of Money," The B.E. Journal of Macroeconomics, De Gruyter, vol. 10(1), pages 1-26, June.
    12. Yann Duval & Stephen Hamilton, 2002. "Strategic Environmental Policy and International Trade in Asymmetric Oligopoly Markets," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 9(3), pages 259-271, May.
    13. Kodjo Adandohoin & Vigninou Gammadigbe, 2022. "The revenue efficiency consequences of the announcement of a tax transition reform: The case of WAEMU countries," African Development Review, African Development Bank, vol. 34(S1), pages 195-218, July.
    14. Sergio Rebelo & Carlos A. Végh, 1995. "Real Effects of Exchange-Rate-Based Stabilization: An Analysis of Competing Theories," NBER Chapters, in: NBER Macroeconomics Annual 1995, Volume 10, pages 125-188, National Bureau of Economic Research, Inc.
    15. Markusen, James R., 2013. "Expansion of trade at the extensive margin: A general gains-from-trade result and illustrative examples," Journal of International Economics, Elsevier, vol. 89(1), pages 262-270.
    16. Haufler, Andreas, 1991. "Alternative tax principles for the European Community: A computable general equilibrium comparison," Discussion Papers, Series II 151, University of Konstanz, Collaborative Research Centre (SFB) 178 "Internationalization of the Economy".
    17. Adriana Arreaza Coll & Luis Enrique Pedauga, 2007. "Instituciones, estructura económica y política económica: ¿qué hay detrás de la inflación en América Latina?," Monetaria, CEMLA, vol. 0(1), pages 7-48, enero-mar.
    18. Tapio Palokangas, 2003. "Inflationary Financing of Government Expenditure in an Endogenous Growth Model," German Economic Review, Verein für Socialpolitik, vol. 4(1), pages 121-137, February.
    19. Rafael Aigner, 2014. "Environmental Taxation and Redistribution Concerns," FinanzArchiv: Public Finance Analysis, Mohr Siebeck, Tübingen, vol. 70(2), pages 249-277, June.
    20. Joe Haslag & Joydeep Bhattacharya & Steven Russell, 2003. "Understanding the Roles of Money, or When is the Friedman Rule Optimal, and Why?," Working Papers 0301, Department of Economics, University of Missouri.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:duk:dukeec:97-18. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Department of Economics Webmaster (email available below). General contact details of provider: http://econ.duke.edu/ .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.