Tariffs vs Quotas in a Model of Trade with Capital Accumulation

Calzolari, Giacomo ; Lambertini, Luca (2000) Tariffs vs Quotas in a Model of Trade with Capital Accumulation. DOI 10.6092/unibo/amsacta/682.
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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 quantity-equivalent import quota to the adoption of the tariff.

Abstract
Document type
Monograph (Working Paper)
Creators
CreatorsAffiliationORCID
Calzolari, Giacomo
Lambertini, Luca
Keywords
intra-industry trade trade policy differential games capital accumulation
Subjects
DOI
Deposit date
17 Jun 2004
Last modified
17 Feb 2016 14:00
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