{[ promptMessage ]}

Bookmark it

{[ promptMessage ]}

17%20Barriers%20to%20Imports,%20IQs%20and%20VERs

17%20Barriers%20to%20Imports,%20IQs%20and%20VERs - Barriers...

Info icon This preview shows pages 1–4. Sign up to view the full content.

View Full Document Right Arrow Icon
1 1 Barriers to Imports: IQs & VERs Tariffs: Measuring the Amount of Protection Import Quotas Voluntary Export Restraints Other Import Barrier Instruments 2 Measuring the Amount of Protection A tariff on an imported good raises the price received by domestic producers of that good. 3 Measuring the Amount of Protection Simple measurements of protection: 1. If the tariff is ad valorem , the tariff rate itself should measure the amount of protection. 2. If the tariff is specific , dividing the tariff by the price net of the tariff gives the ad valorem equivalent. 4 Measuring the Amount of Protection Problems with these simple measurements: 1. If the small country assumption is NOT a good approximation, part of the effect of a tariff will be to lower foreign export prices rather than to raise domestic import prices. 2. Tariffs also have very different effects at different stages of production of a good.
Image of page 1

Info icon This preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon