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The mercantilist index of trade policy
Anderson, James E.; Neary, J. Peter
We introduce an index of trade policy restrictiveness defined as the uniform tariff which maintains the same trade volume as a given tariff/quota structure. Our index overcomes the problems of the trade-weighted average tariff: it avoids substitution bias, correctly accounts for general equilibrium transfers, and takes import volume rather than welfare as benchmark. Empirical applications to international cross-section and time-series comparisons of trade policy confirm our theoretical results: trade-weighted average tariffs generally underestimate the true height of tariffs as measured by the trade-volume-equivalent index; this in turn always underestimates the welfare-equivalent index. OECD ; Economic and Social Research Council (ESRC)
Keyword(s): Tariffs; Quotas; Trade Restrictiveness Index; Trade liberalisation; International trade policy; F13; International trade; Tariff; Restraint of trade; Commercial policy
Publication Date:
2009
Type: Working paper
Peer-Reviewed: Unknown
Language(s): English
Institution: University College Dublin
Publisher(s): University College Dublin. School of Economics
File Format(s): other; application/pdf
First Indexed: 2012-08-25 05:22:44 Last Updated: 2018-10-11 15:45:11