Optimal Tariffs and Subsidies and Changes in Markets Structure
12 Pages Posted: 20 Feb 2001
Date Written: November 2000
Abstract
We present a unified treatment of optimal trade policy for a small country. The well-known results for duopoly and competitive markets emerge as benchmark cases of our model. In addition, we show that changes in market structure have non-monotonic effects on optimal tariffs. Our results suggest that the recent reduction of tariffs in Eastern Europe is consistent with welfare maximizing trade policy in response to the substantial changes in the market structure of these countries.
Keywords: Market structure, strategic trade policy, rent shifting
JEL Classification: F1
Suggested Citation: Suggested Citation
Westermann, Frank and Egli, Dominik, Optimal Tariffs and Subsidies and Changes in Markets Structure (November 2000). Available at SSRN: https://ssrn.com/abstract=260929 or http://dx.doi.org/10.2139/ssrn.260929
Feedback
Feedback to SSRN