Tariffs, The Terms of Trade and Domestic Prices in a Monetary Economy

Batra, Raveendra N.; Ramachandran, Rama V.

doi:10.2307/2297005

Cited by 9 publications

(5 citation statements)

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“…Gumpert et al (2016) reveal the propensity of multinational firms to promote tax havens, benefiting from the reallocation of tax revenues. Batra and Ramachandran (1980) find that the imposition of income or profit taxes on multinational firms will lead to capital outflows. Pi and Liu (2022) examine the positive effect of increasing urban bias on multinational firms' ownership of cross-country capital flows.…”

Section: Context: Literature Review and The Necessity Of Distinguishi...mentioning

confidence: 94%

“…Furthermore, some studies suggest that the impact of environmental regulations on FDI cannot be generalized and may vary based on industry, country, and firm characteristics (Cai et al, 2016;Leiter et al, 2011). This paper endeavors to provide insights into this inquiry within the conceptual framework of multinational firms developed by Batra and Ramachandran (1980).…”

Section: Context: Literature Review and The Necessity Of Distinguishi...mentioning

confidence: 99%

“…In the spirit of Batra and Ramachandran (1980), we analyze two small open economies: a source developed country and a recipient developing country. The developed country is comprised of an urban sector and a rural sector.…”

Section: Context: Literature Review and The Necessity Of Distinguishi...mentioning

confidence: 99%

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Pollution control and multinational firms

Liu

2023

Int J of Economic Theory

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This paper analyzes how pollution control in the recipient developing country affects the flow of multinational capital owned by multinational firms in the source developed country. We find that when pollution control in a developing country becomes stricter, then the amount of multinational capital flowing into the developing country will certainly or conditionally decrease. Through further welfare analysis, we hope to provide some policy suggestions that will allow the government to guarantee the welfare of the labor force while it implements stricter pollution control.

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Section: Context: Literature Review and The Necessity Of Distinguishi...mentioning

confidence: 94%

Section: Context: Literature Review and The Necessity Of Distinguishi...mentioning

confidence: 99%

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Pollution control and multinational firms

Liu

2023

Int J of Economic Theory

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“…Reviewing the existing literature, the effects of tariffs under a floating exchange rate regime has been explicitly discussed (e.g. Batra andRamachandean, 1980, Fender andYip, 2000), however, when a country adopted a fixed exchange rate regime and the exchange rate cannot afford transmission function in the economic system, how was the effect of tariff policy on the macroeconomic variables has not yet been discussed completely. Furthermore, consumption home bias is a phenomenon that exists commonly in the real world, indicating that in an economic system, consumers often have a tendency to prefer domestic commodities.…”

Section: Introductionmentioning

confidence: 99%

The Effects of Tariff Policy under the Fixed Exchange Rate Regime

Lai¹

2016

International Journal of Financial Research

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In this paper, New Open Economy Macroeconomics with micro-foundation was served as an analytical framework to explore the long-term effects of tariffs on various macroeconomic variables (e.g. consumption, output, price and terms of trade, and so on) while a country adopts a fixed exchange rate regime and with the presence of consumption home bias behavior. Through theoretical derivation and simulation analysis, we discovered that the correlation of domestic tariff rate with single variables for the long-term does not have monotonic nature, which shall depend on home (foreign) consumers' consumptive preferences on imports and exports.

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“…For instance, the dictum of classical trade theory that, for a small open economy, an improvement in the terms of trade is beneficial does not, in general, hold in the case of a monetary economy 〈see Kemp [1990] and Palivos and Yip [1996]〉. 1 There has been some work in the literature on the effects of a tariff within a general equilibrium model of money 〈notably, Takayama [1978 and1981], Batra and Ramachandran [1980]〉. These papers have indubitably generated useful insights in the analysis of nominal issues, such as the effects of a tariff on the domestic price level, the nominal exchange rate and the balance of payments.…”

Section: Introductionmentioning

confidence: 99%

Metlzer 's Paradox and the Optimum Tariff in a Monetary Economy

Palivos¹,

Yip²,

Chong³

1998

JEI

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We augment the standard two country, two-commodity and two-factor trade model by allowing for money to exist as an additional asset. We find that it is possible for an increase in the domestic tariff to worsen the terms of trade if the i m p o r table sector is severely distorted by the existence of money. More o v e r, the Metzler condition is no longer both necessary and sufficient to rule out the Metzler paradox. Finally, we show that the conventional formula for the optimum tariff , derived in barter trade models, has a downward (upward) bias if money is more (less) efficacious in the importable sector. "In the real world there is no simple dividing line between trade and monetary issues." K r ugman and Obstfeld [1994], p. 8.

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Tariffs, The Terms of Trade and Domestic Prices in a Monetary Economy

Cited by 9 publications

References 0 publications

Pollution control and multinational firms

Pollution control and multinational firms

The Effects of Tariff Policy under the Fixed Exchange Rate Regime

Metlzer 's Paradox and the Optimum Tariff in a Monetary Economy

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