TARIFFS AND WELFARE IN AN IMPERFECTLY COMPETITIVE OVERLAPPING GENERATIONS MODEL

Partha Sen
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Partha Sen: Delhi School of Economics

No 46, Working papers from Centre for Development Economics, Delhi School of Economics

Abstract: The effects of a tariff is analyzed in a two-sector model in an uncertain lifetime’s framework. One of the sectors is monopolistically competitive. It is shown that while a tariff leads to a consumption boom and' possibly a current account surplus, its welfare effects depend on whether the homogeneous good or the differentiated good is exported by the small open economy, The paper provides a link between the models of the "new" trade theory and those of New-Keynesian Macroeconomics.

Pages: 26 pages
Date: 1997-06
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