Domestic distortions and international trade Anderson, James E; Bannister, Geoffrey J; Neary, J Peter

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Authors
Anderson, James E ; Bannister, Geoffrey J ; Neary, J Peter
Appears In
International Economic Review
Subjects
International trade -- Analysis; Restraint of trade -- Analysis; hf commerce
Audience
Academic
Summary
In this paper, we develop techniques for measuring the trade policy equivalent of domestic distortions, using a distance function approach. Our measure, the Trade Restrictiveness Index, is shown to equal the uniform tariff which is welfare equivalent to a given pattern of domestic taxes and subsidies. We extend the index to incorporate taxes in markets for nontraded goods and factors of production and illustrate its operationality with an application to liberalisation in Mexican agriculture. We conclude that our index has considerable potential in empirical work and as an aid to trade negotiators.
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http://trove.nla.gov.au/work/154559
Work ID
154559

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