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Import Tariffs and Growth in a Model with Habits

Been-Lon Chen, Shun-Fa Lee and Koji Shimomura
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Shun-Fa Lee: Tamkang University

A chapter in International Trade and Economic Dynamics, 2009, pp 299-322 from Springer

Abstract: This chapter studies the long-run relationship between tariffs and economic growth in a two-country AK growth model. We find that a sufficiently high tariff can increase or decrease economic growth and depends on the levels of productivity coefficients in both countries. Moreover, the Ricardian theorem of comparative advantage is sustained in the long-run equilibrium and local indeterminacy emerges in the case of incomplete specialization under milder conditions compared with conventional literature.

Keywords: Home Country; Time Preference; Consumption Good; Investment Good; Tariff Rate (search for similar items in EconPapers)
Date: 2009
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Persistent link: https://EconPapers.repec.org/RePEc:spr:sprchp:978-3-540-78676-4_22

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DOI: 10.1007/978-3-540-78676-4_22

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