Domestic Distortions and International Trade

James Anderson and J. Peter Neary

CEP Discussion Papers from Centre for Economic Performance, LSE

Abstract: In this paper, we investigate techniques for measuring the trade policy equivalent of domestic distortions, using a distance function approach. Our measure, the Trade Restrictiveness Index, is shown to equal the uniform tariff which is welfare-equivalent to a given pattern of domestic taxes and subsidies. We extend the Index to incorporate taxes in markets for non-traded goods and factors of production and illustrates its operationality with an application to liberalisation in Mexican agriculture. We conclude that our Index has considerable potential in empirical work and as an aid to trade negotiations.

Date: 1993-11
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Citations: View citations in EconPapers (3)

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Related works:
Journal Article: Domestic Distortions and International Trade (1995)
Working Paper: Domestic Distortions and International Trade (1993)
Working Paper: Domestic distortions and international trade (1993)
Working Paper: Domestic distortions and international trade (1992)
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Persistent link: https://EconPapers.repec.org/RePEc:cep:cepdps:dp0179

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