Tax Britannica: Nineteenth Century Tariffs and British National Income

23 Pages Posted: 5 Sep 2001

See all articles by Sami F. Dakhlia

Sami F. Dakhlia

University of Tennessee, Chattanooga - Department of Finance

John V. Nye

George Mason University - Department of Economics; Mercatus Center; National Research University Higher School of Economics

Date Written: May 27, 2004

Abstract

The literature on British economic history presumes that Britain was a free trader after the repeal of the Corn Laws. Thus her tariff levels were below those which were optimal for maximizing utility. Presumably, if the optimal British tariff was positive and greater than the levels established by mid-century, a reduction to zero of all tariffs that remained would have lowered British welfare even further. In this paper, we use a simple computable general equilibrium model to simulate a drop in all British tariffs to zero. The resulting substantial net increase in British welfare suggests that British tariffs were much higher than would be consistent with an optimum tariff policy. More important, the size of British losses from her high tariff levels suggest that British policy was not consistent with the stance of an ideological free trader.

Keywords: Britain, optimal tariff, free trade, protectionism, Corn Laws, Trade Restrictiveness Index, simulations, computable general equilibrium

JEL Classification: C68, D58, F13, H21, N43

Suggested Citation

Dakhlia, Sami F. and Nye, John V. C., Tax Britannica: Nineteenth Century Tariffs and British National Income (May 27, 2004). Available at SSRN: https://ssrn.com/abstract=282114 or http://dx.doi.org/10.2139/ssrn.282114

Sami F. Dakhlia (Contact Author)

University of Tennessee, Chattanooga - Department of Finance ( email )

TN
United States

John V. C. Nye

George Mason University - Department of Economics ( email )

4400 University Drive
Fairfax, VA 22030
United States
703-993-4272 (Phone)

Mercatus Center ( email )

3434 Washington Blvd., 4th Floor
Arlington, VA 22201
United States

National Research University Higher School of Economics

Myasnitskaya street, 20
Moscow, Moscow 119017
Russia

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