Elsevier

Economics Letters

Volume 45, Issue 2, June 1994, Pages 213-216
Economics Letters

Tariff behavior in five European countries: Further evidence

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Abstract

Temporary movements in the average tariff rate for a country can lead to intertemporal substitution effects. A five-country model of tariff movements is estimated in a generalized system. The tariff formation process follows a random walk for the United Kingdom, Denmark, Sweden, and France, which implies that tariff changes can be viewed as permanent in those countries. However, in Switzerland the cumulative impulse responses to a tariff shock imply not only shock persistence, but shock magnification.

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