Publications [#238405] of Kent P. Kimbrough

Journal Articles

1. Gardner, GW; Kimbrough, KP, Tariffs, interest rates, and the trade balance in the world economy, Journal of International Economics, vol. 27 no. 1-2 (January, 1989), pp. 91-110, Elsevier BV, ISSN 0022-1996
   (last updated on 2022/06/27)

   Abstract:
   A two-commodity intertemporal framework is used to show that, in contrast to the conventional wisdom, both permanent and temporary tariffs may worsen the trade balance of a large country. For a temporary tariff the key condition for this result is a low intertemporal elasticity of substitution in consumption. When a temporary tariff worsens the trade balance the world real interest rate must fall if the tariff-imposing country is running a deficit and rise if it is running a surplus. Temporary tariffs can only worsen the trade balance of a surplus country when international differences in tastes are important. © 1989.