Agricultural Exports, Tariffs and Growth

Leonid V. Azarnert

Research output: Contribution to journalArticlepeer-review

3 Scopus citations

Abstract

This article presents a Ricardian model of trade with learning-by-doing to study the effect of barriers to trade in products with low growth potential on the long-run economic growth. The model shows that, when elasticity of demand for the product with a lower learning potential is lower than unitary, a reduction in the tariff imposed on this product, may shift the demand toward the product with a higher learning potential, thus enhancing economic growth in the exporter economy. Therefore, the current trend of reduction in tariffs on agricultural exports not only generates a positive welfare effect in the short run, but may similarly be beneficial for developing economies in the long run, since it also increases their incentive to develop sectors with higher growth potential.

Original languageEnglish
Pages (from-to)797-807
Number of pages11
JournalOpen Economies Review
Volume25
Issue number4
DOIs
StatePublished - Sep 2014

Keywords

  • Agricultural export
  • Learning-by-doing
  • Trade barriers

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