DP683 A New Approach to Evaluating Trade Policy
|Author(s):||James E Anderson, J Peter Neary|
|Publication Date:||June 1992|
|Keyword(s):||Protection, Quantitative Restrictions, Tariffs, Trade Restrictiveness Index, Voluntary Export|
|Programme Areas:||International Trade and Regional Economics|
|Link to this Page:||cepr.org/active/publications/discussion_papers/dp.php?dpno=683|
This paper introduces a new measure, the Trade Restrictiveness Index, which measures the restrictiveness of a system of trade protection. The index is a general equilibrium application of the distance function and answers the question: `What uniform set of trade restrictions is equivalent (in welfare terms) to the initial protective structure?' The index is applicable to both tariffs and quotas and allows international and intertemporal comparisons. The index is operational and we provide an empirical example to illustrate its applicability and to show its superiority to commonly used measures.