Econometrica

Journal Of The Econometric Society

An International Society for the Advancement of Economic
Theory in its Relation to Statistics and Mathematics

Edited by: Guido W. Imbens • Print ISSN: 0012-9682 • Online ISSN: 1468-0262

Econometrica: Jan, 1992, Volume 60, Issue 1

Trade Reform with Quotas, Partial Rent Retention, and Tariffs

https://doi.org/0012-9682(199201)60:1<57:TRWQPR>2.0.CO;2-Q
p. 57-76

J. Peter Neary, James E. Anderson

Quotas are the predominant means of protection in developed countries, with quota rents commonly shared between exporter and importer. This paper derives shadow prices appropriate to evaluating trade reform under these circumstances, and provides a number of useful sufficient conditions for welfare-improving "piecemeal" reform. In doing so, we apply the distorted (quantity-constrained) expenditure function, and use implicit separability to derive more powerful results than have previously been available.


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