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Tariff Wars and Trade Deals with Costly Government
Author(s) -
Burbidge John,
Myers Gordon
Publication year - 2004
Publication title -
review of international economics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.513
H-Index - 58
eISSN - 1467-9396
pISSN - 0965-7576
DOI - 10.1111/j.1467-9396.2004.00466.x
Subject(s) - tariff , economics , disbursement , government (linguistics) , government revenue , revenue , international economics , lump sum , trade war , international trade , payment , finance , linguistics , philosophy , law , political science , china
The authors study a simple model of tariff wars and trade deals in which government revenue collection and disbursement uses resources. The introduction of costly governments leads to lower non‐cooperative tariffs, the possibility that a less costly government may win a tariff war, and fully cooperative trade deals where countries lower tariffs but do not eliminate them, even with lump‐sum taxes and transfers.