Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/92670
Authors: 
Ikeda, Shinsuke
Year of Publication: 
2000
Series/Report no.: 
ISER Discussion Paper, Institute of Social and Economic Research, Osaka University 519
Abstract: 
Incorporating weakly nonseparable preferences into the familiar time-preference model, we emphasize a role of steady-state welfare changes in determining the effect of permanent tariffs on the current account. The effect consists of: a welfare effect, due to steady-state welfare changes, which is negative (positive) when preferences toward imports are more (less) wealth-enhanced than toward exports; and a substitution effect, which occurs only with initial distortion. Even without initial distortion, a marginal tariff has a first-order welfare effect on the current-account. Its sign does not depend on whether impatience is increasing or decreasing in wealth.
Subjects: 
time preference
weakly nonseparable preferences
current account
JEL: 
F41
F32
F13
Document Type: 
Working Paper

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