Import Tariffs and Growth in a Model with Habits

Been-Lon Chen and Shun-Fa Lee ()

MPRA Paper from University Library of Munich, Germany

Abstract: This paper studies the relationship between tariffs and economic growth in a two-country AK growth model. We find that a sufficiently higher tariff can increase or decrease economic growth, which depends on the levels of productivity coefficients in both countries. Moreover, the Ricardian theorem of comparative advantage holds in the long-run equilibrium and local indeterminacy emerges in the case of incomplete specialization under milder conditions compared with conventional literature.

Keywords: AK growth model; two-country; tariffs; growth; indeterminacy (search for similar items in EconPapers)
JEL-codes: F13 F43 O41 (search for similar items in EconPapers)
Date: 2007-09-01
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Citations: View citations in EconPapers (1)

Published in International Trade and Economic Dynamics (2009): pp. 299-322

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Chapter: Import Tariffs and Growth in a Model with Habits (2009)
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Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:27667

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