Trade liberalization and shadow prices in the presence of tariffs and quotas

J. Peter Neary

No 198904, Working Papers from School of Economics, University College Dublin

Abstract: This paper examines the welfare effects of partial trade liberalization when trade is restricted by tariffs, quotas or some combination of both instruments. Rules for optimal first- and second-best intervention are derived and illustrated (using a new geometric technique) in both small and large open economies. A general expression for shadow prices of factors of production, which applies in both small and large economies, with or without quotas, is also derived. Welfare paradoxes are possible whenever exogenous changes raise (lower) imports of goods subject to trade restrictions which are below (above) optimal levels.

Keywords: Welfare economics; Free trade--Econometric models; Commercial policy (search for similar items in EconPapers)
Date: 1989-04
References: Add references at CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
http://hdl.handle.net/10197/1461 First version, 1989 (application/pdf)

Related works:
Journal Article: Trade Liberalisation and Shadow Prices in the Presence of Tariffs and Quotas (1995)
Working Paper: Trade Liberalization and Shadow Prices in the Presence of Tariffs and Quotas (1989)
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:ucn:wpaper:198904

Access Statistics for this paper

More papers in Working Papers from School of Economics, University College Dublin Contact information at EDIRC.
Bibliographic data for series maintained by Nicolas Clifton ().