The Experts below are selected from a list of 6663 Experts worldwide ranked by ideXlab platform
Hak Choi - One of the best experts on this subject based on the ideXlab platform.
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refuting the Optimal Tariff theory
Social Science Research Network, 2017Co-Authors: Hak ChoiAbstract:This paper disproves the Optimal Tariff theory. Any Tariff or subsidy changes only the relative price, not the offer curve. Its Tariff-affected terms-of-trade is actually an export-subsidy policy. This paper confirms that free trade is indeed universally beneficial.
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the dirty kemp shimomura Optimal Tariff theory
Social Science Research Network, 2013Co-Authors: Hak ChoiAbstract:This paper unveils three dirty tricks exercised by Kemp and Shimomura (2000): 1. They play around with an ambiguous trade balance equation; 2. They change the convex social indifference curve into a concave one; 3. They think they can dictate market prices. Without these tricks, there is no Tariff implication derivable from their model.
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kemp s notorious Optimal Tariff theory
Social Science Research Network, 2013Co-Authors: Hak ChoiAbstract:This paper unveils a serious mistake committed by Kemp (1967). His positive Tariff is actually an export subsidy. The corrected Kemp model implies that the whole Optimal Tariff theory must have been working in the wrong direction.
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graaff s uncertain Optimal Tariff theory
Social Science Research Network, 2013Co-Authors: Hak ChoiAbstract:This paper reviews the Optimal Tariff theory of Kahn (1947) and Graaff (1949), and finds that their solutions are not Optimal. Indeed, their policy recommendations are welfare detrimental. Graaff's Tariff is even uncertain, can be positive or negative.
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kahn s foolish Optimal Tariff theory
Social Science Research Network, 2013Co-Authors: Hak ChoiAbstract:This paper unveils the tricks of how Kahn achieves his Optimal Tariff theory. When corrected, the Optimal Tariff turns out to be zero or negative.Apart from David Ricardo’s comparative advantage, the most influential theory in the international trade study must be the Optimal Tariff theory (C. F. Bickerdike 1906; Francis Y. Edgeworth 1894; Harry G. Johnson 1953; John Kennan and Raymond Riezman 1988; Paul A. Samuelson 1939; 1962). Since this theory claims that some Tariff is better than free trade, some people, e.g., Kahn (1947), Graaff (1949) and Kemp and Shimomura (2000), start to solve for the Optimal rate. This short note will prove that Kahn's foolish theory is wrong.
John Whalley - One of the best experts on this subject based on the ideXlab platform.
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gains and losses from potential bilateral us china trade retaliation
Economic Modelling, 2012Co-Authors: Yan Dong, John WhalleyAbstract:Abstract Two closely related numerical general equilibrium models of world trade are used to analyze the potential consequences of US–China bilateral retaliation on trade flows and welfare. One is a conventional Armington trade model with five regions, the US, China, EU, Japan and the Rest of the World, and calibrated to a global 2009 micro consistent data set. The other is a modified version of this model with monetary non-neutrals and including China's trade surplus as an endogenous variable. Who may gain or loss from global trade conflicts spawned by adjustment pressures in the post crisis world is much debated. In a US–China trade conflict, Europe and Japan would seem gainers from preferential access to US and Chinese markets. The loss of markets would hurt the US, but moving closer to an Optimal Tariff could be the source of terms of trade gains. And the ease of substitution across trading partners' practices would determine costs for China. Results from the conventional model suggest that retaliation between the two countries can be welfare improving for the US as it substitutes expenditures into own goods and improve its terms of trade with non-retaliatory regions, while China and non-retaliatory regions may be adversely affected. Results in the endogenous trade surplus model from the central case model specification, however, suggest that both the US and the EU (the deficit regions) have welfare losses in most cases, while the surplus region, China, and the ROW have welfare gains. In both models, when the bilateral Tariff rates are very high, gains accrue to the EU and Japan from trade diversion if the substitutions elasticities of imports are high. Costs are borne by the US and China in lost exports, lowered terms of trade and adjustment costs at home.
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gains and losses from potential bilateral us china trade retaliation
Social Science Research Network, 2011Co-Authors: Yan Dong, John WhalleyAbstract:Two closely related numerical general equilibrium models of world trade are used to analyze the potential consequences of US-China bilateral retaliation on trade flows and welfare. One is a conventional Armington trade model with five regions, the US, China, EU, Japan and Rest of the World, and calibrated to a global 2009 micro consistent data set. The other is a modified version of this model with monetary non neutrals and including China's trade surplus as an endogenous variable.Who may gain or loss from global trade conflicts spawned by adjustment pressures in the post crisis world is much debated. In a US-China trade conflict, Europe and Japan would seem gainers from preferential access to US and Chinese markets. The loss of markets would hurt the US, but moving closer to an Optimal Tariff could be the source of terms of trade gains. And the ease of substitution across trading partners practices would determine costs for China.Results from the conventional model suggest that retaliation between the two countries can be welfare improving for US as it substitutes expenditures into own goods and improve its terms of trade with non retaliatory regions, while China and non retaliatory regions maybe adversely affected. Results in the endogenous trade surplus model from the central case model specification ,however, suggest that both the US and the EU (the deficit regions) have welfare losses in most cases, while the surplus region, China, and the ROW have welfare gains. In both models, when the bilateral Tariff rates are very high, gains accrue to the EU and Japan from trade diversion if the substitutions elasticities of imports are high. Costs will are borne by the US and China in lost exports, lowered terms of trade and adjustment costs at home.
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Optimal Tariff Calculations in Tariff Games with Climate Change Considerations
2010Co-Authors: Yan Dong, John WhalleyAbstract:We discuss whether or not the introduction of climate change considerations into Nash Tariff games increases or reduces post retaliation Tariffs. We briefly discuss how climate change considerations can be introduced into computational trade models. We then calculate Optimal Tariffs in comparable conventional (no climate change considerations present) and with climate change trade models. Results show that compared to conventional trade models, adding climate change considerations reduces the level of Optimal Tariffs, but this only occurs when the damage effects involved are large.
Winston W Chang - One of the best experts on this subject based on the ideXlab platform.
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formation of symmetric free trade blocs Optimal Tariff structure and world welfare
Journal of Asian Economics, 2021Co-Authors: Winston W Chang, Tailiang Chen, Tetsuya SaitoAbstract:Abstract We present a new Tariff-game rule and a new numeraire rule in Krugman's celebrated model to form symmetric trading blocs. We hold that to maintain logical consistency in a world of symmetric trading blocs, an individual bloc should act on the actions of other individual external blocs in a one-to-one fashion, rather than to the actions of the rest of the world as a whole as assumed by Krugman, and show that Krugman's seemingly innocuous choice of the world price of a given good as the numeraire will produce asymmetry in the optimum Nash equilibrium Tariff. We prove that the Optimal Tariff schedule is monotonically decreasing in our relative bloc size, and that the world welfare increases with our new relative bloc size as the latter grows beyond the lowest-welfare pessimal number, which is rather small by our simulations. Though confined to symmetric trading blocs, this paper fortifies the analytical foundation of Krugman's model. In some sense, it reinforces Kemp-Wan-Shimomura's and Ohyama-Panagariya-Krishna's results with the provisos that countries are symmetric and interact mutually in a symmetric fashion without a compensation scheme. It strengthens the case of regionalism as a stepping stone (building bloc) toward a complete world economic integration.
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Optimal trade and privatization policies in an international duopoly with cost asymmetry
2005Co-Authors: Winston W ChangAbstract:This paper examines Optimal trade and privatization policies in a mixed duopoly in which a pubic home firm competes with a more efficient foreign firm. The home firm is a Cournot competitor or a Stackelberg leader. The home government chooses the degree of privatization and import Tariff to maximize national welfare. The paper examines the policy effects on industry equilibrium with general demand and cost structures and shows that the Optimal level of privatization depends crucially upon the strategic substitutability-complementarity assumption. It further shows that if both policies are used under linear demand and quadratic costs, the equilibrium prices, firms' outputs, welfare and Tariff rates are the same under Cournot and Stackelberg competition, and price equals the home firm's marginal cost. Neither full nationalization nor full privatization is Optimal under Cournot, but full nationalization is always Optimal under Stackelberg competition. If only one policy is used, a reduction in government's ownership of the public firm under Cournot competition and constant marginal costs calls for a higher Optimal Tariff rate. This result does not carry over to the case of increasing marginal costs, although the Optimal Tariff is lower under full nationalization than under full privatization.
Tetsuya Saito - One of the best experts on this subject based on the ideXlab platform.
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formation of symmetric free trade blocs Optimal Tariff structure and world welfare
Journal of Asian Economics, 2021Co-Authors: Winston W Chang, Tailiang Chen, Tetsuya SaitoAbstract:Abstract We present a new Tariff-game rule and a new numeraire rule in Krugman's celebrated model to form symmetric trading blocs. We hold that to maintain logical consistency in a world of symmetric trading blocs, an individual bloc should act on the actions of other individual external blocs in a one-to-one fashion, rather than to the actions of the rest of the world as a whole as assumed by Krugman, and show that Krugman's seemingly innocuous choice of the world price of a given good as the numeraire will produce asymmetry in the optimum Nash equilibrium Tariff. We prove that the Optimal Tariff schedule is monotonically decreasing in our relative bloc size, and that the world welfare increases with our new relative bloc size as the latter grows beyond the lowest-welfare pessimal number, which is rather small by our simulations. Though confined to symmetric trading blocs, this paper fortifies the analytical foundation of Krugman's model. In some sense, it reinforces Kemp-Wan-Shimomura's and Ohyama-Panagariya-Krishna's results with the provisos that countries are symmetric and interact mutually in a symmetric fashion without a compensation scheme. It strengthens the case of regionalism as a stepping stone (building bloc) toward a complete world economic integration.
Yan Dong - One of the best experts on this subject based on the ideXlab platform.
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gains and losses from potential bilateral us china trade retaliation
Economic Modelling, 2012Co-Authors: Yan Dong, John WhalleyAbstract:Abstract Two closely related numerical general equilibrium models of world trade are used to analyze the potential consequences of US–China bilateral retaliation on trade flows and welfare. One is a conventional Armington trade model with five regions, the US, China, EU, Japan and the Rest of the World, and calibrated to a global 2009 micro consistent data set. The other is a modified version of this model with monetary non-neutrals and including China's trade surplus as an endogenous variable. Who may gain or loss from global trade conflicts spawned by adjustment pressures in the post crisis world is much debated. In a US–China trade conflict, Europe and Japan would seem gainers from preferential access to US and Chinese markets. The loss of markets would hurt the US, but moving closer to an Optimal Tariff could be the source of terms of trade gains. And the ease of substitution across trading partners' practices would determine costs for China. Results from the conventional model suggest that retaliation between the two countries can be welfare improving for the US as it substitutes expenditures into own goods and improve its terms of trade with non-retaliatory regions, while China and non-retaliatory regions may be adversely affected. Results in the endogenous trade surplus model from the central case model specification, however, suggest that both the US and the EU (the deficit regions) have welfare losses in most cases, while the surplus region, China, and the ROW have welfare gains. In both models, when the bilateral Tariff rates are very high, gains accrue to the EU and Japan from trade diversion if the substitutions elasticities of imports are high. Costs are borne by the US and China in lost exports, lowered terms of trade and adjustment costs at home.
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gains and losses from potential bilateral us china trade retaliation
Social Science Research Network, 2011Co-Authors: Yan Dong, John WhalleyAbstract:Two closely related numerical general equilibrium models of world trade are used to analyze the potential consequences of US-China bilateral retaliation on trade flows and welfare. One is a conventional Armington trade model with five regions, the US, China, EU, Japan and Rest of the World, and calibrated to a global 2009 micro consistent data set. The other is a modified version of this model with monetary non neutrals and including China's trade surplus as an endogenous variable.Who may gain or loss from global trade conflicts spawned by adjustment pressures in the post crisis world is much debated. In a US-China trade conflict, Europe and Japan would seem gainers from preferential access to US and Chinese markets. The loss of markets would hurt the US, but moving closer to an Optimal Tariff could be the source of terms of trade gains. And the ease of substitution across trading partners practices would determine costs for China.Results from the conventional model suggest that retaliation between the two countries can be welfare improving for US as it substitutes expenditures into own goods and improve its terms of trade with non retaliatory regions, while China and non retaliatory regions maybe adversely affected. Results in the endogenous trade surplus model from the central case model specification ,however, suggest that both the US and the EU (the deficit regions) have welfare losses in most cases, while the surplus region, China, and the ROW have welfare gains. In both models, when the bilateral Tariff rates are very high, gains accrue to the EU and Japan from trade diversion if the substitutions elasticities of imports are high. Costs will are borne by the US and China in lost exports, lowered terms of trade and adjustment costs at home.
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Optimal Tariff Calculations in Tariff Games with Climate Change Considerations
2010Co-Authors: Yan Dong, John WhalleyAbstract:We discuss whether or not the introduction of climate change considerations into Nash Tariff games increases or reduces post retaliation Tariffs. We briefly discuss how climate change considerations can be introduced into computational trade models. We then calculate Optimal Tariffs in comparable conventional (no climate change considerations present) and with climate change trade models. Results show that compared to conventional trade models, adding climate change considerations reduces the level of Optimal Tariffs, but this only occurs when the damage effects involved are large.