Multiple equilibria and protectionism
Autor(a) principal: | |
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Data de Publicação: | 1994 |
Tipo de documento: | Artigo |
Idioma: | eng |
Título da fonte: | Repositório Institucional do FGV (FGV Repositório Digital) |
Texto Completo: | http://hdl.handle.net/10438/12381 |
Resumo: | In a nonnative approach, I analyze trade policies when the industrial sector genentes positive extemalities in production, and there are adjustments costs to changing production from one sector to the other. Protectionist trade policy can make workers intemalize the benetits from moving into the industrial sector, but it is a second best policy as it also causes consumption distortions. I show that if the govemment is able to fully commit to its tariff schedule for the future, the welfare maximizing policy is to maintain a positive tariff forever, even after all adjustment has already taken place . However, if the govemment is not able to commit at all, the only time consistent policy is zero tariff at any point in time. The time inconsistency of the full commitment policy is derived from the fact that in the model only production needs interference, and the production distortion is lagged one period with respect to the tariff wbile the consumption distortion is simultaneous to the tariff. In the intermediary case, i.e., when the government can commit for a limited period of time, the time consistent optimal tariff will be positive but lower than the 'full commitment' tariff. This result indicates that some institutions that have always been considered pure sources of inefficiency, such as protectionist lobbying, may in fact be welfare improving in some cases! |
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Terra, Maria Cristina T.Escolas::EPGEFGV2014-11-11T13:03:47Z2014-11-11T13:03:47Z1994-01-17http://hdl.handle.net/10438/12381In a nonnative approach, I analyze trade policies when the industrial sector genentes positive extemalities in production, and there are adjustments costs to changing production from one sector to the other. Protectionist trade policy can make workers intemalize the benetits from moving into the industrial sector, but it is a second best policy as it also causes consumption distortions. I show that if the govemment is able to fully commit to its tariff schedule for the future, the welfare maximizing policy is to maintain a positive tariff forever, even after all adjustment has already taken place . However, if the govemment is not able to commit at all, the only time consistent policy is zero tariff at any point in time. The time inconsistency of the full commitment policy is derived from the fact that in the model only production needs interference, and the production distortion is lagged one period with respect to the tariff wbile the consumption distortion is simultaneous to the tariff. In the intermediary case, i.e., when the government can commit for a limited period of time, the time consistent optimal tariff will be positive but lower than the 'full commitment' tariff. This result indicates that some institutions that have always been considered pure sources of inefficiency, such as protectionist lobbying, may in fact be welfare improving in some cases!engEscola de Pós-Graduação em Economia da FGVSeminários de pesquisa econômica da EPGETodo cuidado foi dispensado para respeitar os direitos autorais deste trabalho. Entretanto, caso esta obra aqui depositada seja protegida por direitos autorais externos a esta instituição, contamos com a compreensão do autor e solicitamos que o mesmo faça contato através do Fale Conosco para que possamos tomar as providências cabíveisinfo:eu-repo/semantics/openAccessMultiple equilibria and protectionisminfo:eu-repo/semantics/publishedVersioninfo:eu-repo/semantics/articleEconomiaProtecionismo e livre câmbioEquilíbrio econômicoreponame:Repositório Institucional do FGV (FGV Repositório Digital)instname:Fundação Getulio Vargas (FGV)instacron:FGVORIGINAL000089003.pdf000089003.pdfapplication/pdf1472840https://repositorio.fgv.br/bitstreams/eb6d127d-a499-4066-b0c3-1a0a91b189f1/download12afd2060b20461aaf7059c7e625fe39MD51LICENSElicense.txtlicense.txttext/plain; charset=utf-84707https://repositorio.fgv.br/bitstreams/b2f80851-5e52-4e12-bc28-d9bb853c2c13/downloaddfb340242cced38a6cca06c627998fa1MD52TEXT000089003.pdf.txt000089003.pdf.txtExtracted 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dc.title.eng.fl_str_mv |
Multiple equilibria and protectionism |
title |
Multiple equilibria and protectionism |
spellingShingle |
Multiple equilibria and protectionism Terra, Maria Cristina T. Economia Protecionismo e livre câmbio Equilíbrio econômico |
title_short |
Multiple equilibria and protectionism |
title_full |
Multiple equilibria and protectionism |
title_fullStr |
Multiple equilibria and protectionism |
title_full_unstemmed |
Multiple equilibria and protectionism |
title_sort |
Multiple equilibria and protectionism |
author |
Terra, Maria Cristina T. |
author_facet |
Terra, Maria Cristina T. |
author_role |
author |
dc.contributor.unidadefgv.por.fl_str_mv |
Escolas::EPGE |
dc.contributor.affiliation.none.fl_str_mv |
FGV |
dc.contributor.author.fl_str_mv |
Terra, Maria Cristina T. |
dc.subject.area.por.fl_str_mv |
Economia |
topic |
Economia Protecionismo e livre câmbio Equilíbrio econômico |
dc.subject.bibliodata.por.fl_str_mv |
Protecionismo e livre câmbio Equilíbrio econômico |
description |
In a nonnative approach, I analyze trade policies when the industrial sector genentes positive extemalities in production, and there are adjustments costs to changing production from one sector to the other. Protectionist trade policy can make workers intemalize the benetits from moving into the industrial sector, but it is a second best policy as it also causes consumption distortions. I show that if the govemment is able to fully commit to its tariff schedule for the future, the welfare maximizing policy is to maintain a positive tariff forever, even after all adjustment has already taken place . However, if the govemment is not able to commit at all, the only time consistent policy is zero tariff at any point in time. The time inconsistency of the full commitment policy is derived from the fact that in the model only production needs interference, and the production distortion is lagged one period with respect to the tariff wbile the consumption distortion is simultaneous to the tariff. In the intermediary case, i.e., when the government can commit for a limited period of time, the time consistent optimal tariff will be positive but lower than the 'full commitment' tariff. This result indicates that some institutions that have always been considered pure sources of inefficiency, such as protectionist lobbying, may in fact be welfare improving in some cases! |
publishDate |
1994 |
dc.date.issued.fl_str_mv |
1994-01-17 |
dc.date.accessioned.fl_str_mv |
2014-11-11T13:03:47Z |
dc.date.available.fl_str_mv |
2014-11-11T13:03:47Z |
dc.type.status.fl_str_mv |
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info:eu-repo/semantics/article |
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http://hdl.handle.net/10438/12381 |
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http://hdl.handle.net/10438/12381 |
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eng |
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eng |
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Seminários de pesquisa econômica da EPGE |
dc.rights.driver.fl_str_mv |
info:eu-repo/semantics/openAccess |
eu_rights_str_mv |
openAccess |
dc.publisher.none.fl_str_mv |
Escola de Pós-Graduação em Economia da FGV |
publisher.none.fl_str_mv |
Escola de Pós-Graduação em Economia da FGV |
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