Lerner Symmetry: A Modern Treatment
<jats:p> Which policies are protectionist and which ones are not? The Lerner Symmetry Theorem establishes that import tariffs and export taxes are equally protectionist. In this paper we provide a modern treatment of this classical result, highlighting the importance of multinational firms, gl...
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| Other Authors: | |
| Format: | Article |
| Language: | English |
| Published: |
American Economic Association
2021
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| Online Access: | https://hdl.handle.net/1721.1/136512 |
| _version_ | 1826200519258931200 |
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| author | Costinot, Arnaud Werning, Iván |
| author2 | Massachusetts Institute of Technology. Department of Economics |
| author_facet | Massachusetts Institute of Technology. Department of Economics Costinot, Arnaud Werning, Iván |
| author_sort | Costinot, Arnaud |
| collection | MIT |
| description | <jats:p> Which policies are protectionist and which ones are not? The Lerner Symmetry Theorem establishes that import tariffs and export taxes are equally protectionist. In this paper we provide a modern treatment of this classical result, highlighting the importance of multinational firms, global imbalances, and imperfect competition. Under perfect competition, the result follows from the separability of consumption and production across countries, ruling out tourism and some forms of multinational firms, but not others. Though we do not require trade balance, the role of initial assets is subtle: our result rules out foreign ownership of domestic assets, but does not constrain domestic ownership of foreign assets. Under imperfect competition, our result effectively rules out all multinational firms. We conclude by discussing the implications for border adjustment taxes. (JEL D41, D43, F13, F14, F23) </jats:p> |
| first_indexed | 2024-09-23T11:37:43Z |
| format | Article |
| id | mit-1721.1/136512 |
| institution | Massachusetts Institute of Technology |
| language | English |
| last_indexed | 2024-09-23T11:37:43Z |
| publishDate | 2021 |
| publisher | American Economic Association |
| record_format | dspace |
| spelling | mit-1721.1/1365122023-02-17T18:48:17Z Lerner Symmetry: A Modern Treatment Costinot, Arnaud Werning, Iván Massachusetts Institute of Technology. Department of Economics <jats:p> Which policies are protectionist and which ones are not? The Lerner Symmetry Theorem establishes that import tariffs and export taxes are equally protectionist. In this paper we provide a modern treatment of this classical result, highlighting the importance of multinational firms, global imbalances, and imperfect competition. Under perfect competition, the result follows from the separability of consumption and production across countries, ruling out tourism and some forms of multinational firms, but not others. Though we do not require trade balance, the role of initial assets is subtle: our result rules out foreign ownership of domestic assets, but does not constrain domestic ownership of foreign assets. Under imperfect competition, our result effectively rules out all multinational firms. We conclude by discussing the implications for border adjustment taxes. (JEL D41, D43, F13, F14, F23) </jats:p> 2021-10-27T20:35:44Z 2021-10-27T20:35:44Z 2019 2019-10-23T15:57:22Z Article http://purl.org/eprint/type/JournalArticle https://hdl.handle.net/1721.1/136512 en 10.1257/AERI.20170006 American Economic Review: Insights Article is made available in accordance with the publisher's policy and may be subject to US copyright law. Please refer to the publisher's site for terms of use. application/pdf American Economic Association American Economic Association |
| spellingShingle | Costinot, Arnaud Werning, Iván Lerner Symmetry: A Modern Treatment |
| title | Lerner Symmetry: A Modern Treatment |
| title_full | Lerner Symmetry: A Modern Treatment |
| title_fullStr | Lerner Symmetry: A Modern Treatment |
| title_full_unstemmed | Lerner Symmetry: A Modern Treatment |
| title_short | Lerner Symmetry: A Modern Treatment |
| title_sort | lerner symmetry a modern treatment |
| url | https://hdl.handle.net/1721.1/136512 |
| work_keys_str_mv | AT costinotarnaud lernersymmetryamoderntreatment AT werningivan lernersymmetryamoderntreatment |