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Vlad Manole and Will Martin
''Aggregating trade distortions''
( 2016, Vol. 36 No.1 )
We analyze the properties of tariff revenue and expenditure aggregators - tariff aggregators that keep expenditure, respectively tariff revenue constant and, in the case of the second aggregator, we correct the definition. Furthermore, under common assumptions in applied trade, we develop closed-form solutions for the expenditure and tariff revenue aggregators, which allows for practical applications of these aggregators in empirical trade. We also explore the relations between the trade-weighted average tariff, the expenditure aggregator and the revenue aggregator. We use these aggregators in a standard general equilibrium model for three countries to analyze the welfare gains from trade liberalization and compare the results.
Keywords: tariff aggregators, expenditure aggregator, tariff revenue aggregator
JEL: F1 - Trade: General
Manuscript Received : Dec 23 2015 Manuscript Accepted : Mar 17 2016

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