SENSITIVITY OF RESOURCE ALLOCATION SHIFTS TO THE SIZE OF TARIFF REDUCTIONS

Date

1980

Author

Baysan, Tercan

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A general equilibrium model which provides a framework for estimating the directions in which resources would be reallocated when tariff duties are reduced at different rates is developed and applied to the Turkish economy. Sectoral output expansions and contractions are simulated under 10,20,30 and 50 percent across - the - board tariff reductions. By comparing sectoral output expansions and contractions for all solutions, we can establish whether or not the direction of changes in sectoral output levels is sensitive to the size of tariff reductions in the short - run. Such an exercise would be helpful in finding the possible direction of resource reallocation which might be induced by a unilateral move on the part of Turkey in liberalizing her foreign trade policy. Furthermore, solution results will also provide a criterion on the basis of which we can identify Turkish industries which show static comparative advantage.

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https://hdl.handle.net/11511/111339

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Department of Economics, Article