Energy tariffs in a small open economy

Henry Thompson

Energy Economics, 2014, vol. 44, issue C, 63-67

Abstract: Tariffs on imported energy alter production and redistribute income. The present paper examines a small open economy producing two traded goods with capital, labor, and imported energy. A tariff reduces import and domestic factor income but payment to one domestic factor rises. Energy intensive output falls but the other output may rise in the general equilibrium. Political opinions on the tariff would differ. Revenue is concave in the tariff suggesting that the government might set the tariff to maximize revenue. A simulation illustrates these general equilibrium properties across a range of tariffs.

Keywords: Energy tariffs; Tariff revenue; General equilibrium (search for similar items in EconPapers)
JEL-codes: F11 F13 F18 Q40 Q43 Q48 (search for similar items in EconPapers)
Date: 2014
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:eneeco:v:44:y:2014:i:c:p:63-67

DOI: 10.1016/j.eneco.2014.03.026

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