Price transmission, domestic relative incentives and inter-sector resource flow analysis

Arbeitspapier

This paper models the implications of partial pass-through of tariff/subsidy-inclusive border prices for the domestic relative incentive structure and inter-sector resource flow. The paper shows that partial pass-through reduces nominal protection, affects substitutability in the economy and ultimately the pattern of relative sectoral incentives. In general, the smaller the pass-through the smaller the lowering of pro-importables and anti-exportables incentive biases after tariff reforms. Consequently, commercial policy is unlikely to achieve full extent of inter-sector resource flows, at least in the short-term. Sluggish export supply response to tariff reforms in developing countries could be due to major pass-through problems.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: CREDIT Research Paper ; No. 03/21

Classification and Topics

• Classification: Wirtschaft

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Zgovu, Evious K.
• Event: Veröffentlichung
• (who): The University of Nottingham, Centre for Research in Economic Development and International Trade (CREDIT)
• (where): Nottingham
• (when): 2003

Further information

• Handle: http://hdl.handle.net/10419/65479
• Last update: 10.03.2025, 11:44 AM CET