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Optimal policy intervention to reduce import dependence

Nettle, Richard S.; Britten-Jones, Mark; Anderson, Kym


Should a country wish to reduce its dependence on imports of a certain commodity, an import tariff is typically recommended as the first-best (lowest-cost) policy instrument for achieving this non-economic objective. This note shows that while this is correct if the objective is to restrain imports to a certain quantity, it is not correct if the target is to reduce imports to a certain percentage of domestic consumption. In the latter case, a tariff-funded subsidy to producers is also...[Show more]

CollectionsANU Research Publications
Date published: 1987
Type: Journal article
Source: International Economic Journal
DOI: 10.1080/10168738700000030


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