Asymmetric model of neoclassical trade and optimum tax-subsidy-tariff policy

This work constructs an asymmetric structure of neoclassical model of trade, and reexamines the theorems of trade, which were derived originally in 2 × 2 × 2 paradigm. Absence of non-traded sector, noted by Bhagwati, has been highlighted in a more serious fashion. Then optimum price distortions in the form of taxes, subsidies, and tariffs are introduced, and optimality of the price distortions is ascertained.