Lerner symmetry theorem

The Lerner symmetry theorem is a result used in international trade theory, which states that, based on an assumption of a zero balance of trade (that is, the value of exported goods equals the value of imported goods for a given country), an ad valorem import tariff (a percentage of value or an amount per unit) will have the same effects as an export tax. The theorem is based on the observation that the effect on relative prices is the same regardless of which policy (ad valorem tariffs or export taxes) is applied.

The theorem was developed by economist Abba P. Lerner in 1936.[1][2]

Notes

  1. ↑ A. P. Lerner, 1936. "The Symmetry Between Import and Export Taxes", Economica, N.S., 3(11), pp. 306-313.
  2. ↑ Jagdish N. Bhagwati, Arvind Panagariya, and T. N. Srinivasan, 1998 Lectures On International Trade, 2nd Edition, MIT Press. Description and ch. 12, sect. 12-6, Lerner Symmetry Theorem, scrollable preview, pp. 215-19.
This article is issued from Wikipedia - version of the 11/5/2016. The text is available under the Creative Commons Attribution/Share Alike but additional terms may apply for the media files.