IDEAS home Printed from https://ideas.repec.org/p/pra/mprapa/56525.html
   My bibliography  Save this paper

Traded Goods, Tax and Intermediation - the Role of Corrupt Nontraded Sector

Author

Listed:
  • Mandal, Biswajit

Abstract

This paper uses a Heckscher-Ohlin nugget framework with both traded and non-traded goods. Our motive is to investigate the effects of corruption and tax cut. We assume only the non-traded sector to be corruption affected. We argue that a fall in the degree of corruption surprisingly increases number of intermediators while tax change has no effect on it. But the size of the intermediation activities expands in both the cases. Low corruption diminishes the exportable production and raises importable production while a tax cut does not have any effect. The welfare implication is ambiguous in case of a decrease in cost of corruption. A tax cut, however, raises the welfare unambiguously.

Suggested Citation

  • Mandal, Biswajit, 2014. "Traded Goods, Tax and Intermediation - the Role of Corrupt Nontraded Sector," MPRA Paper 56525, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:56525
    as

    Download full text from publisher

    File URL: https://mpra.ub.uni-muenchen.de/56525/1/MPRA_paper_56525.pdf
    File Function: original version
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Bhagwati, Jagdish N, 1982. "Directly Unproductive, Profit-seeking (DUP) Activities," Journal of Political Economy, University of Chicago Press, vol. 90(5), pages 988-1002, October.
    2. Marjit, Sugata, 2003. "Economic reform and informal wage--a general equilibrium analysis," Journal of Development Economics, Elsevier, vol. 72(1), pages 371-378, October.
    3. Brecher, Richard A. & Diaz Alejandro, Carlos F., 1977. "Tariffs, foreign capital and immiserizing growth," Journal of International Economics, Elsevier, vol. 7(4), pages 317-322, November.
    4. Biswajit Mandal & Sugata Marjit, 2012. "Capital inflow, vanishing sector and wage distribution in an economy with corruption related intermediation," Economics Bulletin, AccessEcon, vol. 32(3), pages 2128-2135.
    5. Ronald W. Jones, 2018. "The Structure of Simple General Equilibrium Models," World Scientific Book Chapters, in: International Trade Theory and Competitive Models Features, Values, and Criticisms, chapter 4, pages 61-84, World Scientific Publishing Co. Pte. Ltd..
    6. Mandal, Biswajit & Marjit, Sugata, 2013. "Trade reform, intermediation and corruption," Economic Modelling, Elsevier, vol. 33(C), pages 741-746.
    7. Beladi, Hamid & Yabuuchi, Shigemi, 2001. "Tariff-induced capital inflow and welfare in the presence of unemployment and informal sector," Japan and the World Economy, Elsevier, vol. 13(1), pages 51-60, January.
    8. Ronald Findlay & Ronald W. Jones, 2018. "Factor Bias and Technical Progress," World Scientific Book Chapters, in: International Trade Theory and Competitive Models Features, Values, and Criticisms, chapter 11, pages 167-173, World Scientific Publishing Co. Pte. Ltd..
    9. Kar, Saibal & Marjit, Sugata, 2001. "Informal sector in general equilibrium: welfare effects of trade policy reforms," International Review of Economics & Finance, Elsevier, vol. 10(3), pages 289-300, July.
    10. Ethier, Wilfred J., 1984. "Higher dimensional issues in trade theory," Handbook of International Economics, in: R. W. Jones & P. B. Kenen (ed.), Handbook of International Economics, edition 1, volume 1, chapter 3, pages 131-184, Elsevier.
    11. Marjit, Sugata & Kar, Saibal, 2011. "The Outsiders: Economic Reform and Informal Labour in a Developing Economy," OUP Catalogue, Oxford University Press, number 9780198071495.
    12. Beladi, Hamid & Chao, Chi-Chur, 1993. "Non-traded goods, urban unemployment and welfare in LDCs," European Journal of Political Economy, Elsevier, vol. 9(2), pages 281-292, May.
    13. Mandal, Biswajit & Marjit, Sugata, 2010. "Corruption and wage inequality?," International Review of Economics & Finance, Elsevier, vol. 19(1), pages 166-172, January.
    14. Sugata Marjit & Biswajit Mandal, 2012. "Domestic trading costs and pure theory of international trade," International Journal of Economic Theory, The International Society for Economic Theory, vol. 8(2), pages 165-178, June.
    15. Ronald Jones & Sugata Marjit, 2009. "Competitive trade models and real world features," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 41(1), pages 163-174, October.
    Full references (including those not matched with items on IDEAS)

    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. Mandal Biswajit, 2018. "Tax on Traded Goods, and Corrupt Non-traded Goods Sector: Implications for Intermediation Activities," Review of Economics, De Gruyter, vol. 69(1), pages 27-41, April.
    2. Marjit, Sugata & Mandal, Biswajit, 2010. "Extortion and Informal Sector in a Small Open Economy," MPRA Paper 25044, University Library of Munich, Germany.
    3. Biswajit Mandal, 2016. "Recessionary Shock, Capital Mobility and the Informal Sector," South Asia Economic Journal, Institute of Policy Studies of Sri Lanka, vol. 17(1), pages 149-162, March.
    4. Biswajit Mandal & Prasun Bhattacharjee, 2020. "A Theoretical Note on Sector-specific FDI Inflow in Developing Economies and the Real Exchange Rate," Foreign Trade Review, , vol. 55(2), pages 189-198, May.
    5. Biswajit Mandal, 2022. "Lower Corruption Warrants Less, but Higher Corruption Removes it: A Ricardian Note," Journal of Quantitative Economics, Springer;The Indian Econometric Society (TIES), vol. 20(2), pages 479-486, June.
    6. Biswajit Mandal & Sugata Marjit & Hamid Beladi, 2018. "Reform, informal sector, and extortion," Economics and Politics, Wiley Blackwell, vol. 30(1), pages 106-123, March.
    7. Mandal, Biswajit & Biswas, Anindya, 2015. "Sector Specific Inflow of capital, Non-Traded sector and an Increase in Real Exchange Rate," MPRA Paper 68226, University Library of Munich, Germany.
    8. Mandal, Biswajit & Chaudhuri, Saswati, 2010. "Informal Wage, Informal Price and Extortion under Migration and Tariff Reform," MPRA Paper 28704, University Library of Munich, Germany.
    9. Chaudhuri, Sarbajit & Mukhopadhyay, Ujjaini, 2009. "Revisiting the Informal Sector: A General Equilibrium Approach," MPRA Paper 52135, University Library of Munich, Germany.
    10. Chaudhuri, Sarbajit & Mandal, Biswajit, 2012. "Bureaucratic reform, informal sector and welfare," MPRA Paper 36072, University Library of Munich, Germany.
    11. M. Ali Khan, 2007. "The Harris-Todaro Hypothesis," Labor Economics Working Papers 22206, East Asian Bureau of Economic Research.
    12. Saibal KAR & Biswajit MANDAL & Sugata MARJIT & Vivekananda MUKHERJEE, 2020. "Seeking Rent In The Informal Sector," Annals of Public and Cooperative Economics, Wiley Blackwell, vol. 91(1), pages 151-164, March.
    13. Subhasankar Chattopadhyay & Rima Mondal, 2017. "Characterisation of Economic Growth in Developing Economies with Informal Sector," Economic Papers, The Economic Society of Australia, vol. 36(1), pages 86-101, March.
    14. Jiancai Pi & Pengqing Zhang, 2017. "Social conflict and wage inequality," Journal of Economics, Springer, vol. 121(1), pages 29-49, May.
    15. Beladi, Hamid & Dutta, Meghna & Kar, Saibal, 2016. "FDI and Business Internationalization of the Unorganized Sector: Evidence from Indian Manufacturing," World Development, Elsevier, vol. 83(C), pages 340-349.
    16. Pi, Jiancai & Zhou, Yu, 2013. "Institutional quality and skilled–unskilled wage inequality," Economic Modelling, Elsevier, vol. 35(C), pages 356-363.
    17. Mandal, Biswajit & Roy, Sangita, 2018. "Inflow of Educational Capital, Intermediation and Informal Sector," MPRA Paper 87461, University Library of Munich, Germany.
    18. Mitra, Sudeshna & Gupta, Kausik, 2017. "Liberalization and Welfare Conditions of a Developing Economy: A General Equilibrium Analysis," MPRA Paper 85230, University Library of Munich, Germany.
    19. Mandal, Biswajit, 2014. "Trade Reform, Environment and Intermediation: Implication for Health Standard," MPRA Paper 56524, University Library of Munich, Germany.
    20. Mukherjee, Soumyatanu, 2016. "Technology, trade and ‘urban poor’ in a general equilibrium model with segmented domestic factor markets," International Review of Economics & Finance, Elsevier, vol. 45(C), pages 400-416.

    More about this item

    Keywords

    International Trade; Corruption; General Equilibrium; Welfare.;
    All these keywords.

    JEL classification:

    • D5 - Microeconomics - - General Equilibrium and Disequilibrium
    • D6 - Microeconomics - - Welfare Economics
    • D73 - Microeconomics - - Analysis of Collective Decision-Making - - - Bureaucracy; Administrative Processes in Public Organizations; Corruption
    • F1 - International Economics - - Trade

    NEP fields

    This paper has been announced in the following NEP Reports:

    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:pra:mprapa:56525. 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: Joachim Winter (email available below). General contact details of provider: https://edirc.repec.org/data/vfmunde.html .

    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.