Open AccessEmpirical Problems of Effective Rates of Protection: An Evaluation of Past Experience
Author(s) -
Kurt von Rabenau
Publication year - 1975
Publication title -
pakistan development review
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.154
H-Index - 26
ISSN - 0030-9729
DOI - 10.30541/v14i2pp.155-173
Subject(s) - comparability , currency , order (exchange) , unit (ring theory) , resource (disambiguation) , empirical evidence , economics , empirical research , computer science , macroeconomics , psychology , finance , computer network , philosophy , mathematics education , mathematics , epistemology , combinatorics
During the last 10 years a number of articles have beenpublished on the concept of effective protection. Most of them wereconcerned with theoretical aspects of effective rates of protection(ERPs) in the usual neoclassical framework. There¬fore, practitionershad little help from this literature when they wanted to use the basicERP formula on a more complex world and with limited data supply. Theinsufficient discussion on -the empirical problems might be the mainreason, ex¬plaining why the results of actual calculations of ERPs arehardly comparable. Anyway, in nearly every empirical investigation thatI know of, a different formula has been used [see 1,2,3,5,6,12,14,16,17and 23]. Because the concept of effective protection has in the meantimebeen established as a major tool for analyzing the resource allocationof primary factors between industries and the resource costs ofproducing one unit of domestic currency if output and inputs are valuedat free trade prices it would be worth-while to discuss the majorempirical problems of ERPs in order to bring about comparability betweenfuture results.