Arbeitspapier

Tariffs versus production subsidies as industry protection

This paper provides a welfare comparison of a tariff with a combination of a production subsidy to, and a commodity tax on, an import-competing commodity in a two-country economy. We treat some plausible situations of industry protection, including where the initial tariff is above the optimal tariff, where a certain output level of a tariff-imposed commodity must be maintained, and where there is positive externality of its domestic production. In those cases we explore the optimal combination of the production subsidy and the commodity tax and show it to be superior to the tariff from the welfare viewpoint.

Language
Englisch

Bibliographic citation
Series: ISER Discussion Paper ; No. 865

Classification
Wirtschaft
Neoclassical Models of Trade
Trade Policy; International Trade Organizations
Taxation and Subsidies: Externalities; Redistributive Effects; Environmental Taxes and Subsidies
Subject
Commodity Tax
Production Subsidy
Tariff
Industry Protection
Verbrauchsteuer
Exportsubvention
Subvention
Wohlfahrtsanalyse
Zwei-Länder-Modell
Theorie

Event
Geistige Schöpfung
(who)
Ogawa, Yoshitomo
Ono, Yoshiyasu
Event
Veröffentlichung
(who)
Osaka University, Institute of Social and Economic Research (ISER)
(where)
Osaka
(when)
2013

Handle
Last update
20.09.2024, 8:24 AM CEST

Data provider

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Object type

  • Arbeitspapier

Associated

  • Ogawa, Yoshitomo
  • Ono, Yoshiyasu
  • Osaka University, Institute of Social and Economic Research (ISER)

Time of origin

  • 2013

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