Commodity Taxation and international Trade in Imperfect Markets

Andreas Haufler, Guttorm Schjelderup and Frank Stähler

No 00/32, CoFE Discussion Papers from University of Konstanz, Center of Finance and Econometrics (CoFE)

Abstract: This paper studies non-cooperative commodity taxation in a trade model with im-perfect competition and trade costs. Nationally optimal tax policy simultaneously tries to correct the domestic distortion from imperfect competition and to shift rents to the home country. Importantly, this trade-off depends qualitatively on the inter-national commodity tax regime in operation. For low levels of trade costs, we show that production-based commodity taxes dominate from a global welfare perspective, but this ranking is reversed in favor of consumption-based taxation when trade costs become sufficiently high.

Date: 2000
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Related works:
Working Paper: Commodity Taxation and International Trade in Imperfect Markets (2000)
Working Paper: Commodity Taxation and International Trade in Imperfect Markets (2000)
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Persistent link: https://EconPapers.repec.org/RePEc:zbw:cofedp:0032

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