英文摘要
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This paper introduces a tariff financing regime into a two-sector small open economy model with CES technologies and skill education externalities. Under this theoretical framework, we study the occurrence of indeterminacy. Our main results are the following: given an equal rate tariff on both imported intermediate goods and final goods, agents’ expectations cannot be fulfilled, and thus indeterminacy disappears. We find that as long as tariff rates are equal, the economy exhibits saddle-path stability when the final good is relatively labor-intensive; whereas the dynamic system is unstable when the intermediate good is relatively labor-intensive. However, if the tariff rates are unequal, our numerical simulations show that the economy may exhibit indeterminacy depending on the relative magnitude among these structural parameters such as tariff difference, skill education externality, factor substitution in intermediate goods, and the endogenous factor-intensity in final goods.
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