Trade liberalization and its fiscal implications in a north-south trade model

Stibora, Joachim and de Vaal, Albert (2007) Trade liberalization and its fiscal implications in a north-south trade model. (Discussion Paper) Kingston upon Thames, U.K. : Faculty of Arts and Social Sciences, Kingston University. 41 p. (Economics Discussion Paper)

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We study the fiscal implications of trade liberalization in a North-South trade model with nonhomothetic preferences. Combining a Ricardian trade model with a continuum of competitive goods and a public good, nonhomothetic preferences imply that both the global income distribution and the local income distribution matter for gauging the effects of different trade liberalization regimes on income taxes and public good provision. The fiscal implications of tariff reductions are typically more adverse for poorer countries than for richer countries. We also find that unilateral trade liberalization by richer countries is a more viable policy option to pursue than multilaterally reducing tariffs.

Item Type: Monograph (Discussion Paper)
Additional Information: Economics discussion paper, 2007/1.
Physical Location: This book is held in stock at Kingston University Library
Uncontrolled Keywords: Ricardian trade model, asymmetric demand complementarities, tax reform, public goods, income distribution
Research Area: Economics and econometrics
Faculty, School or Research Centre: Faculty of Arts and Social Sciences > School of Economics (until November 2012)
Depositing User: Cheryl Clark
Date Deposited: 15 Feb 2008
Last Modified: 16 Jul 2012 21:47

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