Journal Articles
Abstract:
This paper develops and tests a public finance theory of tariff behavior. Tariffs are viewed as being part of the optimum revenue raising tax package so that tariff revenue is closely tied to government spending. A key implication of the theory is that tariff rate movements should be consistent with tax-smoothing behavior. The test focuses on the United States during the years 1869-1916. The results of the test support the theory. © 1992.