Article ID | Journal | Published Year | Pages | File Type |
---|---|---|---|---|
5087911 | Journal of Asian Economics | 2006 | 9 Pages |
Abstract
We develop a trade-theoretic model to determine the optimal level of rebate given to the exporting sector on tariffs paid on imported intermediate inputs, when the economy is distorted by an import-substituting bias in its trade policy and is subject to a revenue constraint. By simulating the model, we find that the level of rebate is positively related to both the own-price and the output-price elasticity of demand for intermediate inputs by the exporting sector and that it decreases as the value of the marginal cost for public funds increases.
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Social Sciences and Humanities
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Economics and Econometrics
Authors
Sajal Lahiri, Anjum Nasim,