Habits and Durability in Consumption, and the Effects of Tariff Protection

Arman Mansoorian and Simon Neaime

Working Papers from York University, Department of Economics

Abstract: Some recent empirical findings are used to motivate employing a model in which consumption exhibits durability, and habits develop over the flow of services provided by them, in order to study the effects of tariff protection on the current account. Durability leads to adjacent substitutability in consumption, while habits are assumed to lead to adjacent complementarity. If durability effects are dominant in the short run, and habit effects in the long run, then tariffs will lead to a current account surplus, which will be followed by a deficit. In the opposite case a deficit will be followed by a surplus.

Keywords: Habits; Durability in Consumption; Tariffs; Current Account. (search for similar items in EconPapers)
JEL-codes: F13 F32 (search for similar items in EconPapers)
Pages: 19 pages
Date: 1996-02
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ftp://dept.econ.yorku.ca/pub/working_papers/96-02.pdf First version, 1996

Related works:
Journal Article: Habits and Durability in Consumption, and the Effects of Tariff Protection (2000)
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Persistent link: https://EconPapers.repec.org/RePEc:yca:wpaper:1996_02

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