The mercantilist index of trade policy

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Title: The mercantilist index of trade policy
Authors: Anderson, James E.
Neary, J. Peter
Permanent link: http://hdl.handle.net/10197/1323
Date: 11-Jul-2001
Abstract: We introduce an index of trade policy restrictiveness defined as the uniform tariff which maintains the same trade volume as a given tariff/quota structure. Our index overcomes the problems of the trade-weighted average tariff: it avoids substitution bias, correctly accounts for general equilibrium transfers, and takes import volume rather than welfare as benchmark. Empirical applications to international cross-section and time-series comparisons of trade policy confirm our theoretical results: trade-weighted average tariffs generally underestimate the true height of tariffs as measured by the trade-volume-equivalent index; this in turn always underestimates the welfare-equivalent index.
Funding Details: OECD ; Economic and Social Research Council (ESRC)
Type of material: Working Paper
Publisher: University College Dublin. School of Economics
Keywords: Tariffs;Quotas;Trade Restrictiveness Index;Trade liberalisation;International trade policy
Subject LCSH: International trade
Tariff
Restraint of trade
Commercial policy
Language: en
Status of Item: Not peer reviewed
Appears in Collections:Economics Working Papers & Policy Papers

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