Dynamically Consistent Oil Import Tariffs
Larry Karp and
David M Newbery ()
Canadian Journal of Economics, 1992, vol. 25, issue 1, 1-21
The standard solution of the open-loop optimal import tariff is normally time inconsistent. This paper shows why and derives the dynamically consistent Markov perfect tariff. The two tariffs are compared; they differ except for a special class of import demands. The time paths of tariffs and the welfare cost of an inability to commit are calculated for a dominant importer. The welfare costs of the inability to commit are small if its market share is below one-half.
References: Add references at CitEc
Citations: View citations in EconPapers (22) Track citations by RSS feed
Downloads: (external link)
http://links.jstor.org/sici?sici=0008-4085%2819920 ... DCOIT%3E2.0.CO%3B2-T (text/html)
only available to JSTOR subscribers
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
Persistent link: https://EconPapers.repec.org/RePEc:cje:issued:v:25:y:1992:i:1:p:1-21
Ordering information: This journal article can be ordered from
Access Statistics for this article
Canadian Journal of Economics is currently edited by Katherine Cuff
More articles in Canadian Journal of Economics from Canadian Economics Association Canadian Economics Association Prof. Werrner Antweiler, Treasurer UBC Sauder School of Business 2053 Main Mall Vancouver, BC, V6T 1Z2. Contact information at EDIRC.
Bibliographic data for series maintained by Prof. Werner Antweiler ().