Growth, revenue, and welfare effects of tariff and tax reform: Win-win-win strategies

Research output: Contribution to journalArticle

14 Citations (Scopus)

Abstract

We examine growth, revenue, and welfare effects of tariff and tax reform with a two-good, two-factor endogenous growth model. Learning-by-doing and intersectoral knowledge spillovers contribute to endogenous growth consistent with incomplete specialization. We obtain two main results. First, trade liberalization raises (or lowers) the growth rate if and only if the import sector is more effective-labor-intensive (or capital-intensive). Second, we can attain growth, revenue, and welfare gains by combining consumer-price-neutral tariff and tax reform for growth enhancement with an additional rise in the consumption tax on the less distorted good.

Original languageEnglish
Pages (from-to)1263-1280
Number of pages18
JournalJournal of Public Economics
Volume90
Issue number6-7
DOIs
Publication statusPublished - 2006 Aug
Externally publishedYes

Fingerprint

Welfare effects
Tax reform
Revenue growth
Win-win
Tariff reform
Factors
Knowledge spillovers
Endogenous growth model
Consumer prices
Enhancement
Labor
Learning-by-doing
Welfare gains
Consumption tax
Endogenous growth
Trade liberalization
Import

Keywords

  • Endogenous growth
  • Intersectoral knowledge spillovers
  • Learning-by-doing
  • Stolper-Samuelson theorem
  • Tariff and tax reform

ASJC Scopus subject areas

  • Economics and Econometrics
  • Finance

Cite this

Growth, revenue, and welfare effects of tariff and tax reform : Win-win-win strategies. / Naito, Takumi.

In: Journal of Public Economics, Vol. 90, No. 6-7, 08.2006, p. 1263-1280.

Research output: Contribution to journalArticle

@article{4964f28524b6451cbc0d21e232ae6ce1,
title = "Growth, revenue, and welfare effects of tariff and tax reform: Win-win-win strategies",
abstract = "We examine growth, revenue, and welfare effects of tariff and tax reform with a two-good, two-factor endogenous growth model. Learning-by-doing and intersectoral knowledge spillovers contribute to endogenous growth consistent with incomplete specialization. We obtain two main results. First, trade liberalization raises (or lowers) the growth rate if and only if the import sector is more effective-labor-intensive (or capital-intensive). Second, we can attain growth, revenue, and welfare gains by combining consumer-price-neutral tariff and tax reform for growth enhancement with an additional rise in the consumption tax on the less distorted good.",
keywords = "Endogenous growth, Intersectoral knowledge spillovers, Learning-by-doing, Stolper-Samuelson theorem, Tariff and tax reform",
author = "Takumi Naito",
year = "2006",
month = "8",
doi = "10.1016/j.jpubeco.2005.07.004",
language = "English",
volume = "90",
pages = "1263--1280",
journal = "Journal of Public Economics",
issn = "0047-2727",
publisher = "Elsevier",
number = "6-7",

}

TY - JOUR

T1 - Growth, revenue, and welfare effects of tariff and tax reform

T2 - Win-win-win strategies

AU - Naito, Takumi

PY - 2006/8

Y1 - 2006/8

N2 - We examine growth, revenue, and welfare effects of tariff and tax reform with a two-good, two-factor endogenous growth model. Learning-by-doing and intersectoral knowledge spillovers contribute to endogenous growth consistent with incomplete specialization. We obtain two main results. First, trade liberalization raises (or lowers) the growth rate if and only if the import sector is more effective-labor-intensive (or capital-intensive). Second, we can attain growth, revenue, and welfare gains by combining consumer-price-neutral tariff and tax reform for growth enhancement with an additional rise in the consumption tax on the less distorted good.

AB - We examine growth, revenue, and welfare effects of tariff and tax reform with a two-good, two-factor endogenous growth model. Learning-by-doing and intersectoral knowledge spillovers contribute to endogenous growth consistent with incomplete specialization. We obtain two main results. First, trade liberalization raises (or lowers) the growth rate if and only if the import sector is more effective-labor-intensive (or capital-intensive). Second, we can attain growth, revenue, and welfare gains by combining consumer-price-neutral tariff and tax reform for growth enhancement with an additional rise in the consumption tax on the less distorted good.

KW - Endogenous growth

KW - Intersectoral knowledge spillovers

KW - Learning-by-doing

KW - Stolper-Samuelson theorem

KW - Tariff and tax reform

UR - http://www.scopus.com/inward/record.url?scp=33646242518&partnerID=8YFLogxK

UR - http://www.scopus.com/inward/citedby.url?scp=33646242518&partnerID=8YFLogxK

U2 - 10.1016/j.jpubeco.2005.07.004

DO - 10.1016/j.jpubeco.2005.07.004

M3 - Article

AN - SCOPUS:33646242518

VL - 90

SP - 1263

EP - 1280

JO - Journal of Public Economics

JF - Journal of Public Economics

SN - 0047-2727

IS - 6-7

ER -