Import demand elasticities and trade distortions

"To study the effects of tariffs on gross domestic product (GDP), one needs import demand elasticities at the tariff line level that are consistent with GDP maximization. These do not exist. Kee, Nicita, and Olarreaga modify Kohli's (1991) GDP function approach to estimate demand elasticit...

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Bibliographic Details
Main Author: Nicita, Alessandro
Corporate Author: World Bank
Other Authors: Kee, Hiau Looi
Format: eBook
Language:English
Published: [Washington, D.C] World Bank 2004
Series:Policy research working paper
Subjects:
Online Access:
Collection: World Bank E-Library Archive - Collection details see MPG.ReNa
Description
Summary:"To study the effects of tariffs on gross domestic product (GDP), one needs import demand elasticities at the tariff line level that are consistent with GDP maximization. These do not exist. Kee, Nicita, and Olarreaga modify Kohli's (1991) GDP function approach to estimate demand elasticities for 4,625 imported goods in 117 countries. Following Anderson and Neary (1992, 1994) and Feenstra (1995), they use these estimates to construct theoretically sound trade restrictiveness indices and GDP losses associated with existing tariff structures. Countries are revealed to be 30 percent more restrictive than their simple or import-weighted average tariffs would suggest. Thus, distortion is nontrivial. GDP losses are largest in China, Germany, India, Mexico, and the United States. This paper--a product of the Trade Team, Development Research Group--is part of a larger effort in the group to measure trade restrictiveness"--World Bank web site
Item Description:Includes bibliographical references. - Title from PDF file as viewed on 11/19/2004