Optimal Tariffs and Subsidies and Changes in Market Structure

7 Pages Posted: 21 Aug 2004

See all articles by Dominik Egli

Dominik Egli

University of Bern - Institute of Economics

Frank Westermann

University of Osnabrueck - Department of Economics; CESifo (Center for Economic Studies and Ifo Institute); CESifo (Center for Economic Studies and Ifo Institute) - Ifo Institute

Abstract

The paper presents 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 the authors' model. In addition, it is shown that changes in market structure have nonmonotonic effects on optimal tariffs. The 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.

Suggested Citation

Egli, Dominik and Westermann, Frank, Optimal Tariffs and Subsidies and Changes in Market Structure. Review of Development Economics, Vol. 8, No. 3, pp. 406-412, August 2004. Available at SSRN: https://ssrn.com/abstract=573044

Dominik Egli (Contact Author)

University of Bern - Institute of Economics

Gesellschaftstrasse 49
Bern, CH-3012
Switzerland

Frank Westermann

University of Osnabrueck - Department of Economics ( email )

Rolandstr. 8
Osnabrueck, D-49069
Germany

CESifo (Center for Economic Studies and Ifo Institute)

Poschinger Str. 5
Munich, DE-81679
Germany

CESifo (Center for Economic Studies and Ifo Institute) - Ifo Institute ( email )

Poschinger Str. 5
Munich, 01069
Germany

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