Import Tariffs and Stagflation

Can import tariffs deter outward FDI ?

In this paper we analyze a country’s optimal trade policy when its labor market is unionized and firms are footloose. We show that an important objective for governments to use import protection is to prevent their domestic multinationals to go to a non-unionized location abroad and to serve their country from a distance. A domestic government will set a positive tariff to dissuade its multinat...

Can Carbon Based Import Tariffs Effectively Reduce Carbon Emissions?

We estimate CO2 implicitly contained in traded commodities based on the GTAP 7 data: While net carbon imports into the industrialized countries amount to 15% of their total emissions, net carbon exports of the developing countries amount to 12% of their total emissions, and net carbon exports of China amount to 24% of China's total emissions. We also analyze policies under a global per capita e...

Stagflation, New Products, and Speculation *

The paper looks at the macrowonornic implications of some recent dwelopmetlts in the theory of industrial organization. In a Kalwkian model, firms are assumed IO invest heavily early in the procluct lift cycle, thus creating dective &mad. Conwrsely, it is assumed that late in the product life cyde firms honrd, waiting for new prodrwts in which to invest. IJndcr reasonable conditions, the rates ...

Embodied Carbon Tariffs

Embodied carbon tariffs tax the direct and indirect carbon emissions embodied in trade — an idea popularized by countries seeking to extend the reach of domestic carbon regulations. We investigate their effectiveness using simulations from an applied general equilibrium model of global trade and energy use. We find that the tariffs do reduce foreign emissions, but their ability to improve the g...

Best Practice Tariffs