Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/92831
Authors: 
Ogawa, Yoshitomo
Ono, Yoshiyasu
Year of Publication: 
2013
Series/Report no.: 
ISER Discussion Paper, Institute of Social and Economic Research, Osaka University 865
Abstract: 
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.
Subjects: 
Commodity Tax
Production Subsidy
Tariff
Industry Protection
JEL: 
F11
F13
H23
Document Type: 
Working Paper

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