Agricultural Exports, Tariffs and Growth

16 Pages Posted: 5 Feb 2014

See all articles by Leonid V. Azarnert

Leonid V. Azarnert

National Research University Higher School of Economics

Date Written: January 30, 2014

Abstract

This article presents a Ricardian model of trade with learning-by-doing to study the effect of barriers to trade in products with low growth potential on the long-run economic growth. The model shows that, when elasticity of demand for the product with a lower learning potential is lower than unitary, a reduction in the tariff imposed on this product, may shift the demand toward the product with a higher learning potential, thus enhancing economic growth in the exporter economy. Therefore, the current trend of reduction in tariffs on agricultural exports not only generates a positive welfare effect in the short run, but may similarly be beneficial for developing economies in the long run, since it also increases their incentive to develop sectors with higher growth potential.

Keywords: trade barriers, agricultural export, learning-by-doing

JEL Classification: F110, F150, F410, O410, Q170

Suggested Citation

Azarnert, Leonid V., Agricultural Exports, Tariffs and Growth (January 30, 2014). CESifo Working Paper Series No. 4583, Available at SSRN: https://ssrn.com/abstract=2390622 or http://dx.doi.org/10.2139/ssrn.2390622

Leonid V. Azarnert (Contact Author)

National Research University Higher School of Economics ( email )

Soyza Pechatnikov str., 15
St. Petersburg, 190068
Russia

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