Working Paper Series, Department of Economics, Copenhagen Business School
Udo Kreickemeier and Pascalis Raimondos-Møller
Tariff-Tax Reforms and Market Access
Abstract: Reducing tariffs and increasing consumption taxes is a
standard IMF advice to countries that want to open up their economy without
hurting government finances. Indeed, theoretical analysis of such a
tariff-tax reform shows an unambiguous increase in welfare and government
revenues. The present paper examines whether the country that implements
such a reform ends up opening up its markets to international trade, i.e.
whether its market access improves. It is shown that this is not
necessarily so. We also show that, comparing to the reform of only tariffs,
the tariff-tax reform is a less efficient proposal to follow both as far as
it concerns market access and welfare. JEL code: F13, H20. Keywords: Market
access; tariff reform, consumption tax reform.
Keywords: na; (follow links to similar papers)
JEL-Codes: G10; (follow links to similar papers)
14 pages, January 1, 2006
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