Abstract
The purpose of this paper is to show that if a country wants to eliminate smuggling, it may have to increase rather than decrease the tariff. This paradoxical case could take place if the country in question is large and the foreign elasticity of demand for imports is inelastic.
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References
Bhagwati, Jagdish N.; Hansen, B. "A Theoretical Analysis of Smuggling,"Quarterly Journal of Economics, 87, 2, May 1973, pp. 172–87.
Bhagwati, Jagdish N.; Panagariya, Arvind; Srinivasan, T. N.Lectures on International Trade, Cambridge, MA: MIT Press, 1998, pp. 476–81.
Meade, James E.A Geometry of International Trade, London, United Kingdom: George Allen and Unwin, 1952.
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Yeh, YH. On tariffs and smuggling. International Advances in Economic Research 6, 578–580 (2000). https://doi.org/10.1007/BF02294974
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DOI: https://doi.org/10.1007/BF02294974