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Trade policy and redistribution when preferences are non-homothetic

Quy-Toan Do () and Andrei Levchenko

No 8005, Policy Research Working Paper Series from The World Bank

Abstract: This paper compares redistribution through trade restrictions versus domestic lump-sum transfers. When preferences are non-homothetic, even domestic lump-sum transfers affect relative prices. Thus, contrary to the conventional wisdom, domestic lump-sum transfers are not necessarily superior to distortionary trade policy. The paper develops this argument in the context of the food export bans imposed by many developing countries in the late 2000s.

Keywords: Inequality; International Trade and Trade Rules (search for similar items in EconPapers)
Date: 2017-03-14
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Related works:
Journal Article: Trade policy and redistribution when preferences are non-homothetic (2017) Downloads
Working Paper: Trade Policy and Redistribution when Preferences are Non-Homothetic (2017) Downloads
Working Paper: Trade Policy and Redistribution when Preferences are Non-Homothetic (2017) Downloads
Working Paper: Trade Policy and Redistribution when Preferences are Non-Homothetic (2017) Downloads
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