Potential Pareto-Improving Move Towards Most Favored Nation Tariffs

23 Pages Posted: 22 Dec 2012

See all articles by Sajal Lahiri

Sajal Lahiri

Southern Illinois University Carbondale - Department of Economics

Peri Silva

Kansas State University - Department of Economics

Multiple version iconThere are 2 versions of this paper

Date Written: December 21, 2012

Abstract

We use a multi-country asymmetric oligopolistic framework for segmented markets to study the welfare effects of reducing tariff discrimination --- which we call a move towards Most Favored Nation tariffs. Both unilateral and multilateral reforms are considered. We investigate this issue under different scenarios such as when initial tariffs are arbitrary and when they are optimal. Conditions under which such harmonization are potentially Pareto-improving are derived. We also analyze the effects on individual countries.

Keywords: Tariff reform, MFN, Welfare, Asymmetric Oligopoly

JEL Classification: F10, F11, F13

Suggested Citation

Lahiri, Sajal and Silva, Peri, Potential Pareto-Improving Move Towards Most Favored Nation Tariffs (December 21, 2012). Available at SSRN: https://ssrn.com/abstract=2192590 or http://dx.doi.org/10.2139/ssrn.2192590

Sajal Lahiri (Contact Author)

Southern Illinois University Carbondale - Department of Economics ( email )

MC 415
1000 Faner Drive
Carbondale, IL 62901
United States

Peri Silva

Kansas State University - Department of Economics ( email )

Manhattan, KS 66502-4001
United States

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