Naslov
Comparative static analysis of tariffs in partial equilibrium model: small country case

Autori
Jošić, Hrvoje ; Jošić, Mislav

Izvornik
Poslovna izvrsnost (1846-3355) 9 (2015), 2; 51-62

Vrsta, podvrsta i kategorija rada
Radovi u časopisima, pregledni rad, znanstveni

Ključne riječi
trade policy; dead-weight-loss; maximum revenue tariff; optimum welfare-tariff; small country

Sažetak
According to standard economic theory, imposition of import tariff in a small country always leads to suboptimal allocation of resources and generates irretrievable losses for the society. Nevertheless, governments often decide to impose tariff measures in order to balance the budget or to retaliate against protectionism trade policy of their trade partners. This paper gives some insight into the microeconomic aspects of tariff imposition by analysing changes in consumers' welfare, producers' welfare and net welfare of the society. In addition to that, detailed geometric and algebraic analysis was carried out in order to eludicate the conditions under which tariff imposition can be beneficial for the government by introducing the maximum revenue tariff. Furthermore, prohibitive tariff and autarchy equilibrium associated with it was tackled in detail. In order to asess the net effects of import tariff imposition, the partial equilibrium model was used with several propositions being formulated from the linearised model based on a small country assumptions. Finally, the propositions were carefully elaborated with special emphasis on changes in initial parameters.

Izvorni jezik
Engleski

Znanstvena područja
Ekonomija

POVEZANOST RADA