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Haufler, Andreas
Schjelderup, Guttorm
Stähler, Frank
Year of Publication: 
Series/Report no.: 
CESifo Working Paper 376
This paper studies non-cooperative commodity taxation in a trade model with imperfect competition and trade costs. Nationally optimal tax policy simultaneously tries to correct the domestic distortion from imperfect competition and to shift rents to the home country. Importantly, this trade-off depends qualitatively on the international commodity tax regime in operation. For low levels of trade costs, we show that production-based commodity taxes dominate from a global welfare perspective, but this ranking is reversed in favor of consumption-based taxation when trade costs become sufficiently high.
Commodity taxation
imperfect competition
strategic trade policy
Document Type: 
Working Paper

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