Neary, J. PeterJ. PeterNeary2009-12-162009-12-161993-09-11199328http://hdl.handle.net/10197/1740This paper examines the responsiveness of real income and the balance of payments to external shocks in a small open economy. It is shown that tariff restrictions and age rigidities tend to increase responsiveness and quota restrictions tend to educe it. The implications for policy response are considered and a micro-theoretic foundation for the distinction between expenditure-reducing and expenditure-switching policies is provided.867296 bytesapplication/pdfenInternational trade policyTariffs and quotasDomestic distortionsShadow pricesExternal shocksF13F10Commercial policyStates, Small--Economic conditionsExternalities (Economics)Working Paperhttps://creativecommons.org/licenses/by-nc-sa/1.0/