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Shock Versus Gradualism in Models of Rational Expectations : The Case of Trade Liberalization / Leonardo Auernheimer, Susan George.
- Format:
- Book
- Government document
- Author/Creator:
- Auernheimer, Leonardo.
- Series:
- IMF Working Papers; Working Paper ; No. 1997/122
- IMF Working Papers
- Language:
- English
- Physical Description:
- 1 online resource (20 pages)
- Place of Publication:
- Washington, D.C. : International Monetary Fund, 1997.
- Language Note:
- English
- Summary:
- This paper provides a new argument for “shock” versus “gradualism” in the implementation of trade policies. In the simple context of a small open economy with rational expectations, we consider the comparative welfare effects of eliminating an import tariff either immediately as an unanticipated shock, or gradually over a preannounced length of time. The gradualist policy introduces a distortion in consumption-accumulation decisions and generates welfare costs. And if the gradual change is extended over “too long” a period, these costs may exceed the long-run benefits of liberalization.
- Notes:
- Bibliographic Level Mode of Issuance: Monograph
- Description based on print version record.
- ISBN:
- 9786613800978
- 9781462393299
- 1462393292
- 9781452729039
- 1452729034
- 9781282107625
- 1282107623
- 9781451899795
- 1451899793
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