| 来源类型 | Discussion paper |
| 规范类型 | 论文 |
| 来源ID | DP6903 |
| DP6903 The Composition of Government Spending and the Real Exchange Rate | |
| Philip Lane; Vahagn A. Galstyan | |
| 发表日期 | 2008-07-11 |
| 出版年 | 2008 |
| 语种 | 英语 |
| 摘要 | How do foreign interests influence the policy determination process? What are the welfare implications of such foreign influence? In this paper we develop a model of foreign influence and apply it to the study of optimal tariffs. We develop a two-country voting model of electoral competition, where we allow the incumbent party in each country to take costly actions that probabilistically affect the electoral outcome in the other country. We show that policies end up maximizing a weighted sum of domestic and foreign welfare, and we study the determinants of this weight. We show that foreign influence may be welfare-enhancing from the point of view of aggregate world welfare because it helps alleviate externalities arising from cross-border effects of policies. Foreign influence can however prove harmful in the presence of large imbalances in influence power across countries. We apply our model of foreign influence to the study of optimal trade policy. We derive a modified formula for the optimal import tariff and show that a country's import tariff is more distorted whenever the influenced country is small relative to the influencing country and whenever natural trade barriers between the two countries are small. |
| 主题 | International Trade and Regional Economics ; Public Economics |
| 关键词 | Balance of powers Electoral competition Externalities Foreign influence Import tariffs Welfare |
| URL | https://cepr.org/publications/dp6903 |
| 来源智库 | Centre for Economic Policy Research (United Kingdom) |
| 资源类型 | 智库出版物 |
| 条目标识符 | http://119.78.100.153/handle/2XGU8XDN/535739 |
| 推荐引用方式 GB/T 7714 | Philip Lane,Vahagn A. Galstyan. DP6903 The Composition of Government Spending and the Real Exchange Rate. 2008. |
| 条目包含的文件 | 条目无相关文件。 | |||||
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