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Title: |
Targeted Tariff Protection, Monopolistic
Competition and Demand Interdependence |
| Author: |
Lin, Hwan C. |
| Author
Affiliation: |
U NC, Charlotte |
| Source: |
International Economic Journal, Summer 1996, v. 10, no. 2, pp. 25-49 |
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Publication Date: |
Summer 1996 |
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Abstract: |
This paper examines how the welfare
effects of tariff protection, either targeted or across-the-board, are
dependent critically upon alternative patterns of demand linkages among
several goods from monopolistically competitive sectors. It shows that
when complementary possibilities are present, tariff protection may harm
the import-complementing sector more than it assists the
import-substituting sector, thereby aggravating consumption distortions
and reducing national welfare. It also shows that across-the-board
protection is much less feasible than is targeted protection because the
former requires much more informational details of both demand linkages
among noncompetitive markets and economic structure. |
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