The Lerner Symmetry Theorem: Generalizations and Qualifications

Arnaud Costinot and Iván Werning

No 23427, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: The Lerner Symmetry Theorem (Lerner, 1936) establishes the equivalence between import tariffs and export taxes in a simple neoclassical economy with two countries, two final goods, and no trade costs. In this paper we provide a number of generalizations and qualifications of this well-known result. Among other things, we show that the absence of trade deficits is neither necessary nor sufficient for Lerner Symmetry to hold. We conclude by discussing its implications for border tax adjustments.

JEL-codes: F1 F10 F11 F12 F13 F23 (search for similar items in EconPapers)
Date: 2017-05
New Economics Papers: this item is included in nep-dcm and nep-int
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