Quotas in General Equilibrium
David Baqaee and
Kunal Sangani
No 33695, NBER Working Papers from National Bureau of Economic Research, Inc
Abstract:
We study economies with quotas and other quantity-based distortions. We prove that any feasible distorted allocation can be implemented as the competitive equilibrium of a quota economy. Unlike wedge-based representations of distortions, quota economies are constrained efficient, not subject to the theory of second best, and satisfy macro-envelope conditions. Hence, the effects of technology, distortions, and policy changes can be summarized by a small set of sufficient statistics. We provide a nonparametric and nonlinear characterization of how quota and productivity changes affect aggregate output, and we derive the welfare costs of misallocation from an inverse demand system that maps quota prices to quota levels. We illustrate the framework by quantifying the effects of reforms in several settings: raising the cap on H-1B visas, relaxing single-family zoning in U.S. cities, eliminating New York City’s taxi medallions, phasing out U.S. quotas on Chinese textiles and apparel, and removing capital controls in Argentina. Across these applications, our method flexibly measures the costs of quota distortions and the gains from reform.
JEL-codes: D5 E0 E1 E60 F0 F10 F11 F38 O4 O41 (search for similar items in EconPapers)
Date: 2025-04
Note: EFG ITI
References: Add references at CitEc
Citations:
Downloads: (external link)
http://www.nber.org/papers/w33695.pdf (application/pdf)
Access to the full text is generally limited to series subscribers, however if the top level domain of the client browser is in a developing country or transition economy free access is provided. More information about subscriptions and free access is available at http://www.nber.org/wwphelp.html. Free access is also available to older working papers.
Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
HTML/Text
Persistent link: https://EconPapers.repec.org/RePEc:nbr:nberwo:33695
Ordering information: This working paper can be ordered from
http://www.nber.org/papers/w33695
The price is Paper copy available by mail.
Access Statistics for this paper
More papers in NBER Working Papers from National Bureau of Economic Research, Inc National Bureau of Economic Research, 1050 Massachusetts Avenue Cambridge, MA 02138, U.S.A.. Contact information at EDIRC.
Bibliographic data for series maintained by ().