Tariff-Tax Reforms in Large Economies / Juha Tervala, Giovanni Ganelli.

Format:

Book

Government document

Author/Creator:

Tervala, Juha.

International Monetary Fund. Institute for Capacity Development.

Contributor:

Ganelli, Giovanni.

Series:

IMF Working Papers; Working Paper ; No. 2012/139

IMF Working Papers

Language:

English

Subjects (All):

Tariff--Econometric models.

Tariff.

Taxation--Econometric models.

Taxation.

Physical Description:

1 online resource (33 p.)

Edition:

1st ed.

Place of Publication:

Washington, D.C. : International Monetary Fund, 2012.

Language Note:

English

Summary:

This paper studies tariff-tax reforms in a calibrated two-region global New Keynesian model composed of a developing and an advanced region. In our baseline calibration, a revenue-neutral reform that lowers tariffs in developing countries can reduce domestic welfare. The reason is that the increase in developing countries welfare due to higher output is dominated by the welfare losses stemming from the deterioration of the terms of trade. On the other hand, the reform increases output and welfare in the advanced countries and in the world as a whole. The effects that we highlight have not been studied in previous contributions to the literature, which typically looks at tariff-tax reforms using a small open economy framework. Nominal rigidities have important implications for adjustment dynamics in our model. In the case of a "point-for-point" reform, for example, price stickiness implies that the international dynamics of output is reversed compared to a revenue neutral reform.

Contents:

Cover; Abstract; Contents; I. Introduction; Tables; 1. Tariff Reductions under the Uruguay Round; II. The Model; A. Households; B. The Government; C. Firms; D. The Consolidated Budget Constraint; E. The Initial Steady State; III. Parameterization; IV. Revenue neutral tariff-tax reform; 2. Model Parameterization; Figures; 1. Effects of a Domestic Revenue Neutral Tariff-Tax Reform; 3. Impact of a domestic tariff-tax reform on the DPV of domestic, foreign and world; V. Point-For-Point Tariff-Tax Reform; 4. Sensitivity analysis: The sign of the welfare effect of a domestic tariff-tax reform

VI. Conclusions5. Impact of a domestic tariff-tax reform on the DPV of domestic, foreign and world; 2. Effects of a Domestic Point-For-Point Tariff-Tax Reform; References; References

Notes:

"Institute for Capacity Development."

"May 2012."

Includes bibliographical references.

Description based on print version record.

ISBN:

9781475511000

1475511000

9781475555608

1475555601

OCLC:

794856558