Economic Growth and Optimal Tariffs
Date Issued
2010
Date
2010
Author(s)
Tsay, Yih-Shan
Abstract
This thesis is written for two purposes. The first purpose is trace the optimal consumption tariff rate for a small country featuring both production externalities proposed by Barro (1990) and labor externalities proposed by Benhabib-Farmer (1994). We have found the following main results: (i) the optimal tariff would be positive if and only if the distortion of government infrastructure expenditure exists; (ii) the optimal tariff rate would be higher when the monopoly power of intermediate goods market is stronger; (iii) tariff is growth-neutral and has an ambiguous effect on labor employment.
The second propose is to discuss the possibility of indeterminacy. We have shown that, dissimilar with Benhabib-Farmer (1994), local indeterminacy would occur in the dynamic system no matter when the elasticity of labor output is larger or low sufficiently.
Subjects
Optimal tariffs
Endogenous growth
Indeterminacy
Production externalities
Small open economy
SDGs
Type
thesis
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