Abstract
Recently the U.S. has been concerned about huge current-account imbalance against Japan, and has proposed various means of trade management. It is also insisted that the imbalance is caused by Japan’s high saving. An asset-holding tax may be a direct means of decreasing saving. In this paper we shall show that although these policies improve the US current-account deficit, they would lower the US lifetime utility. Specifically, using a two-country one-commodity model with dynamic optimization, this paper analyzes the effect on the discounted value of utility stream of saving-control policies which reduce current-account imbalance, such as asset-holding taxes, import quotas, and voluntary export restraints (VERs).
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Ono, Y., Ikeda, S. (1996). International Welfare Effects of Saving Controls and Trade Restrictions. In: Sato, R., Ramachandran, R., Hori, H. (eds) Organization, Performance and Equity. Research Monographs in Japan-U.S. Business & Economics, vol 1. Springer, Boston, MA. https://doi.org/10.1007/978-1-4615-6267-2_14
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DOI: https://doi.org/10.1007/978-1-4615-6267-2_14
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