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Bob first explains the neoclassical theory of "optimal tariffs," by which a large country can use a modest tariff to improve its terms of trade. He then shows how this theoretical possibility is consistent with standard arguments making the case for free trade.
Mentioned in the Episode and Other Links of Interest:
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Bob first explains the neoclassical theory of "optimal tariffs," by which a large country can use a modest tariff to improve its terms of trade. He then shows how this theoretical possibility is consistent with standard arguments making the case for free trade.
Mentioned in the Episode and Other Links of Interest:
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