SHOULD A LARGE COUNTRY SUSTAlN LAISSEZ FAIRE IN THE LONG-RUN?

Tsuyoshi Toshimitsu

No 18, Discussion Paper Series from School of Economics, Kwansei Gakuin University

Abstract: This paper analyses whether laissez faire is superior to tariff protection in the long-run, provided that the government of an importing country cannot precommit to an ex ante optimal tariff rate. We consider the cases of perfectly competitive foreign exporters and a monopolistic foreign exporter. In the case of perfect competition, the government should always choose laissez faire. However, in the case of monopoly, choosing laissez faire or tariff protection depends on the market size of the importing country.

JEL-codes: F1 (search for similar items in EconPapers)
Pages: 21 pages
Date: 1997-09, Revised 1997-09
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http://192.218.163.163/RePEc/pdf/kgdp18.pdf First version, 1997 (application/pdf)

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Persistent link: https://EconPapers.repec.org/RePEc:kgu:wpaper:18

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