Answers are grounded in this paper and cite their sources.
Actual trade and tariff policy prefers ad valorem tariffs to specific tariffs. Yet in this paper we show that, in a setting of monopolistic competition, realizing a given restriction on imports via a specific tariff would generate more consumer utility than obtaining the same restriction via an ad valorem tariff. JEL classification: F12
No takes yet. Share an insight, caveat, or question.
Jørgensen et al. (2005) studied this question.
Synapse has enriched 5 related papers. Consider them for comparative context: