A General Equilibrium Model of Tariffs in a Non-Competitive Economy

Abstract

The recognition of the many theoretical defects in the partial-equilibrium measures of resource pulls and resource costs under different tariff and exchange rate policies has led to a renewed interest in general-equilibrium models of these phenomenon. Recent works in this area utilizing general-equilibrium systems have assumed perfectly competitive economies as their starting points. This paper discusses the major difficulties with the use of such competitive models.