Bilateral Tariffs Under International Competition

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Tác giả: Tsotne Kutalia, Revaz Tevzadze

Ngôn ngữ: eng

Ký hiệu phân loại: 337.2 International economics

Thông tin xuất bản: 2020

Mô tả vật lý:

Bộ sưu tập: Báo, Tạp chí

ID: 163802

Comment: 16 pages, 3 figuresThis paper explores the gain maximization problem of two nations engaging in non-cooperative bilateral trade. Probabilistic model of an exchange of commodities under different price systems is considered. Volume of commodities exchanged determines the demand each nation has over the counter party's currency. However, each nation can manipulate this quantity by imposing a tariff on imported commodities. As long as the gain from trade is determined by the balance between imported and exported commodities, such a scenario results in a two party game where Nash equilibrium tariffs are determined for various foreign currency demand functions and ultimately, the exchange rate based on optimal tariffs is obtained.
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