scholarly journals Comparative Advantage and Optimal Trade Policy

2013 ◽  
Author(s):  
Arnaud Costinot ◽  
Dave Donaldson ◽  
Jonathan Vogel ◽  
Ivan Werning
Keyword(s):  
Trade Policy ◽  
Comparative Advantage ◽  
Optimal Trade Policy

scholarly journals Comparative Advantage and Optimal Trade Policy *

2015 ◽  
Vol 130 (2) ◽  
pp. 659-702 ◽  
Author(s):  
Arnaud Costinot ◽  
Dave Donaldson ◽  
Jonathan Vogel ◽  
Iván Werning
Keyword(s):  
Trade Policy ◽  
Comparative Advantage ◽  
Trade Theory ◽  
The Core ◽  
Export Subsidies ◽  
Ricardian Model ◽  
Optimal Trade Policy

Abstract The theory of comparative advantage is at the core of neoclassical trade theory. Yet we know little about its implications for how nations should conduct their trade policy. For example, should import sectors with weaker comparative advantage be protected more? Conversely, should export sectors with stronger comparative advantage be subsidized less? In this article we take a first stab at exploring these issues. Our main results imply that in the context of a canonical Ricardian model, optimal import tariffs should be uniform, whereas optimal export subsidies should be weakly decreasing with respect to comparative advantage, reflecting the fact that countries have more room to manipulate prices in their comparative-advantage sectors. Quantitative exercises suggest substantial gains from such policies relative to simpler tax schedules.

scholarly journals Welfare reducing trade and optimal trade policy

1998 ◽  
Vol 10 (2) ◽  
pp. 187-198 ◽  
Author(s):  
E Kwan Choi ◽  
Hamid Beladi
Keyword(s):  
Trade Policy ◽  
Optimal Trade Policy
Sign in / Sign up

Export Citation Format

Share Document