Tariffs vs Quotas in a Model of Trade with Capital Accumulation

Lambertini, Luca ; Calzolari, Giacomo (2000) Tariffs vs Quotas in a Model of Trade with Capital Accumulation. Bologna: Dipartimento di Scienze economiche DSE, p. 15. DOI 10.6092/unibo/amsacta/4909. In: Quaderni - Working Paper DSE (392). ISSN 2282-6483.
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Abstract

This paper examines the equivalence among price-modifying and quantity fixing international trade policies in a differential game. We employ two well known capital accumulation dynamics for firms, due to Nerlove and Arrow and to Ramsey, respectively. We show that, in both cases, open-loop and closed-loop Nash equilibria coincide. Under the former accumulation the tariff-quota equivalence holds, but it does not under the latter. Moreover, in the Ramsey model, the country setting the trade policy prefers a quantityequivalent import quota to the adoption of the tariff.

Abstract
Document type
Monograph (Working Paper)
Creators
CreatorsAffiliationORCID
Lambertini, Luca
Calzolari, Giacomo
Keywords
intra-industry trade, trade policy, differential games, capital accumulation
Subjects
ISSN
2282-6483
DOI
Deposit date
21 Mar 2016 08:44
Last modified
21 Mar 2016 08:44
URI

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