The Mercantilist Index of Trade Policy

James Anderson and J. Peter Neary

International Economic Review, 2003, vol. 44, issue 2, 627-649

Abstract: We introduce an index of trade policy restrictiveness defined as the uniform tariff that maintains the same trade volume as a given tariff/quota structure. Our index overcomes the problems of the trade-weighted average tariff: It avoids substitution bias, correctly accounts for general equilibrium transfers, and takes import volume instead of welfare as benchmark. Empirical applications to international cross section and time-series comparisons of trade policy confirm our theoretical results: Trade-weighted average tariffs generally underestimate the true height of tariffs as measured by the trade-volume-equivalent index; this in turn always underestimates the welfare-equivalent index. Copyright 2003 By The Economics Department Of The University Of Pennsylvania And Osaka University Institute Of Social And Economic Research Association.

Date: 2003
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Related works:
Working Paper: The mercantilist index of trade policy (2001)
Working Paper: The Mercantilist Index of Trade Policy (1999)
Working Paper: The Mercantilist Index of Trade Policy (1998)
Working Paper: The Mercantilist Index of Trade Policy (1998)
Working Paper: The Mercantilist Index of Trade Policy (1998)
Working Paper: The mercantilist index of trade policy (1998)
Working Paper: The Mercantilist Index of Trade Policy (1998)
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