The Global Efficiency of Radial Tax Reductions

George Fane

International Economic Review, 1991, vol. 32, issue 4, 853-57

Abstract: Existing results on the efficiency consequences of a radial reduction in all tax and subsidy distortions in a small, competitive, open economy are extended by using revealed preference theory to analyze finite changes, rather than infinitessimal changes, and to allow both for the endogenous determination of which goods are imported, which exported, and which nontraded, and also for the possibility that a finite policy change may cause switches of particular goods among these three categories. Copyright 1991 by Economics Department of the University of Pennsylvania and the Osaka University Institute of Social and Economic Research Association.

Date: 1991
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