Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/101760 
Year of Publication: 
1994
Series/Report no.: 
Diskussionsbeiträge - Serie II No. 234
Publisher: 
Universität Konstanz, Sonderforschungsbereich 178 - Internationalisierung der Wirtschaft, Konstanz
Abstract: 
The paper analyzes the implications of allowing for trade deflection under the restricted origin principle. It is shown that (a) producer trade deflection leads to circular trade and must be ruled out to obtain a trade equilibrium, (b) consumer trade deflection will not occur in a Nash equilibrium when transaction costs are linear (zero) and tax rates are endogenized, (c) with strictly convex transaction costs model results do not differ qualitatively from those obtained in the absence of trade deflection. Together, these results give some theoretical support for the no cross-hauling assumption typically used in multi-country trade modelling.
Subjects: 
tax differentials
cross-hauling
JEL: 
F15
H73
Document Type: 
Working Paper

Files in This Item:
File
Size
636.32 kB





Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.