Tariff revenue, government expenditure and growth in a small open economy

Research output: Contribution to journalArticle

1 Citation (Scopus)

Abstract

I develop a small open endogenous growth model with domestic and foreign intermediate goods. The Marshallian external economies in the domestic intermediate goods sector work as the engine of sustained growth. The model offers two arguments. First, imposing a trade distortion is growth- and welfare-improving if the government uses the tariff revenue for correcting the domestic distortion. Second, comparing the tariff with a lump-sum tax as a financing device, the former is certainly worse than the latter with respect to both growth and welfare if the two intermediate goods are substitutes.

Original languageEnglish
Pages (from-to)391-406
Number of pages16
JournalJapanese Economic Review
Volume51
Issue number3
Publication statusPublished - 2000
Externally publishedYes

Fingerprint

Tariffs
Small open economy
Intermediate goods
Government growth
Revenue
Government expenditure
External economies
Sustained growth
Endogenous growth model
Government
Financing
Substitute
Tax
Trade distortions

ASJC Scopus subject areas

  • Economics and Econometrics

Cite this

Tariff revenue, government expenditure and growth in a small open economy. / Naito, Takumi.

In: Japanese Economic Review, Vol. 51, No. 3, 2000, p. 391-406.

Research output: Contribution to journalArticle

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