ON TARIFF PREFERENCES AND DELEGATION DECISIONS IN CUSTOMS UNIONS: A HECKSCHER-OHLIN APPROACH
This paper studies preferences of customs union (CU) members over common external tariff (CET) levels and extends the literature on delegation decisions over trade policy in models with production. In a model with similar CU members, we prove that most-preferred CETs can be ranked with the help of c...
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| Published in | The Economic journal (London) Vol. 112; no. 481; pp. 625 - 648 |
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| Main Author | |
| Format | Journal Article |
| Language | English |
| Published |
Oxford UK
Blackwell Publishers
01.07.2002
Oxford University Press |
| Subjects | |
| Online Access | Get full text |
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| Abstract | This paper studies preferences of customs union (CU) members over common external tariff (CET) levels and extends the literature on delegation decisions over trade policy in models with production. In a model with similar CU members, we prove that most-preferred CETs can be ranked with the help of compensated price elasticities of import demand functions. In the Heckscher-Ohlin trade model, we show these elasticities depend on inter-country differences in relative factor endowments and inter-sectoral differences in technology. This helps identify the optimal policy maker in a CU and demonstrates delegation decisions over trade policy can be integrated into mainstream trade theory. |
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| AbstractList | This paper studies preferences of customs union members over common external tariff levels and extends the literature on delegation decisions over trade policy in models with production. In a model with similar customs union members, it is proven that most-preferred common external tariffs can be ranked with the help of compensated price elasticities of import demand functions. In the Heckscher-Ohlin trade model, it is shown that these elasticities depend on inter-country differences in relative factor endowments and inter-sectoral differences in technology. This helps identify the optimal policymaker in a customs union and demonstrates delegation decisions over trade policy can be integrated into mainstream trade theory. This paper studies preferences of customs union (CU) members over common external tariff (CET) levels and extends the literature on delegation decisions over trade policy in models with production. In a model with similar CU members, we prove that most-preferred CETs can be ranked with the help of compensated price elasticities of import demand functions. In the Heckscher-Ohlin trade model, we show these elasticities depend on inter-country differences in relative factor endowments and inter-sectoral differences in technology. This helps identify the optimal policy maker in a CU and demonstrates delegation decisions over trade policy can be integrated into mainstream trade theory. |
| Author | Syropoulos, Constantinos |
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| Cites_doi | 10.1017/CBO9780511628627 10.1093/oep/51.2.239 10.2307/2297974 10.1016/0014-2921(94)00007-M 10.1093/oxfordjournals.oep.a041494 10.1016/S0022-1996(00)00064-7 10.2307/136187 10.1016/S0022-1996(96)01443-2 10.1016/0022-1996(85)90006-6 10.2307/135520 10.1016/S1573-4404(05)80011-5 10.1111/1468-0297.00336 10.1162/003355397555136 10.1016/S0022-1996(96)01429-8 10.1111/1468-0297.00334 10.2139/ssrn.229823 10.2307/2296006 10.1016/0022-1996(95)01412-8 10.1257/jel.38.2.287 10.1017/CBO9780511599118.004 |
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| References | Bagwell K. (b2_219) 1998; 108 b26_243 b4_221 b15_232 Levy P. I. (b16_233) 1997; 87 b12_229 Mayer W. (b17_234) 1981; 33 b6_223 Syropoulos C. (b20_237) 1994; 27 b22_239 Gatsios K. (b11_228) 1991; 58 Johnson H. G. (b13_230) 1953; 21 b25_242 Brander J. A. (b9_226) 1985; 16 b7_224 b10_227 b24_241 b21_238 Bhagwati J. N. (b5_222) 1998; 108 Kennan J. (b14_231) 1990; 23 b19_236 b1_218 b8_225 b3_220 b23_240 Panagariya A. (b18_235) 2000; 38 |
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| SubjectTerms | Customs unions Decision making models Demand curves Economic theory Economics Endowments GATT Heckscher-Ohlin theorem Preferences Preferential tariffs Price elasticity Price elasticity of demand Studies Tariff preferences Tariffs Terms of trade Trade Trade agreements Trade policy |
| Title | ON TARIFF PREFERENCES AND DELEGATION DECISIONS IN CUSTOMS UNIONS: A HECKSCHER-OHLIN APPROACH |
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