Abstract

In this paper the optimal tariff policy in the context of a very simple model of two consumption goods and two inputs are analysed. One of the inputs is completely mobile between sectors and the other is a quasi-fixed factor, the latter being considered fixed in the short run and completely mobile in the long run. In the first section a partial approach is carried out, with intertemporal maximization of income at international prices. In the second section a more general approach is pursued with intertemporal utility maximization by agents. We start from a very high tariff level, reaching in both models the same results: the optimal tariff policy is at the beginning a sharp decrease in the tariff level, reaching a point where subsidies to imports should be paid. These subsidies are gradually reduced until the optimal zero tariff is reached.