The Optimal Degree of Reciprocity in Tariff Reduction
Pao-Li Chang ()
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Pao-Li Chang: School of Economics, Singapore Management University
No 19-2020, Economics and Statistics Working Papers from Singapore Management University, School of Economics
This paper characterizes the optimal reciprocal trade policy in the environment of Melitz (2003) with ﬁrm productivity heterogeneity. With all the conﬂicting eﬀects of import tariﬀs on welfare considered, the optimal degree of reciprocity in multilateral tariﬀ reduction is shown to be free trade.
Keywords: Firm Heterogeneity; Reciprocal Trade Policy (search for similar items in EconPapers)
JEL-codes: F12 F13 (search for similar items in EconPapers)
Pages: 18 pages
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Persistent link: https://EconPapers.repec.org/RePEc:ris:smuesw:2020_019
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