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Senior Fellows/Fellows

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Senior Fellows/Fellows

A Second-best Argument for Low Optimal Tariffs

Lorenzo CALIENDO, Robert C. FEENSTRA, John ROMALIS, Alan M. TAYLOR
We derive a new formula for the optimal uniform tariff in a small-country, heterogeneous-firm model with roundabout production and a nontraded good. Tariffs are applied on imported intermediate inputs. First-best policy requires that markups on domestic intermediate inputs are offset by subsidie...
Keywords: Trade Policy, monopolistic competition, gains from trade, input-output linkages
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Annual Conference

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Economic Transformation of Asia, Senior Fellows/Fellows

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May 2018

How Did China's WTO Entry Affect U.S. Prices?

Robert C. FEENSTRA, John ROMALIS, Mary AMITI, Mi DAI
We analyze the effects of China's rapid export expansion following its WTO entry on the U.S. prices of manufacturing goods between 2000 and 2006, exploiting cross-industry variation in trade liberalization. Lower input tariffs in China lowered costs and, in conjunction with reduced U.S. tariff uncer...
Keywords: Trade liberalization, Input tariffs, China exports, Variety
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