| Summary: | 博士 === 中國文化大學 === 經濟學研究所 === 96 === Based on the framework of New Open Economy Macroeconomics Model, we utilize a dynamic general equilibrium model with micro-foundations, price sticky and monopolistic competition to discuss the impacts of changes of tariff on aggregate variables (e.g. consumption, production, terms of trade, current account, real interest rate, the exchange rate and the welfare) of each country in the long-run and short-run, respectively. We also investigate the welfare effect of policy coordination in the second part of this thesis.
The main findings of this thesis are as follow:
(i) If prices are flexible, an increase in tariff rates will have positive effects on domestic consumption, foreign output, terms of trade, and foreign price index, but negative effects on foreign consumption, domestic output, exchange rate, as well as domestic price index. An increase of tariff will have no effect on world consumption and production level.
(ii) On the other hand, if prices are sticky, an increase in tariff rates will have positive effects on the terms of trade and real interest rate, but negative effects on the foreign consumption, exchange rate, the world consumption and world production. However, it will have no effect on current account. The effects on domestic consumption and output are ambiguous.
(iii) The welfare effect of changes of tariff for each country is ambiguous. It depends upon the substitution elasticity between goods, the elasticity of the marginal utility of real money balance, and the size of country.
(iv) If we impose asymmetric assumption in the model, specifically, asymmetric transportation cost, coordination among tariff policies will increase welfare of both countries.
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