Tariffs, The Terms of Trade and Domestic Prices in a Monetary Economy: A Further Analysis
The purpose of this note is to re-examine the recent Batra-Ramachandran (B-R, 1980) investigation of the effects of tariffs in a monetary economy. In particular, we show that under flexible exchange rates the Metzler condition is necessary and sufficient for avoiding the Metzler tariff paradox, as in the usual barter model, thus extending B-R's discussion. Furthermore, we show that the Metzler condition is sufficient for both a tariff-induced appreciation of the exchange rate (under flexible exchange rates) and a tariff-induced payments surplus (under fixed exchange rates). These results can be contrasted with B-R's negative contention that such effects are "indeterminate". This note thus reconciles B-R's results with those we reported elsewhere (Anderson and Takayama 1978).
Metlzer’s Paradox and the Optimum Tariff in a Monetary Economy
We augment the standard two country, two-commodity and two-factor trade model by allowing for money to exist as an additional asset. We find that it is possi - ble for an increase in the domestic tariff to worsen the terms of trade if the importable sector is severely distorted by the existence of money. Moreover, the Metzler condition is no longer both necessary and sufficient to rule out the Metzler paradox. Finally, we show that the conventional formula for the optimum tariff, derived in barter trade models, has a downward (upward) bias if money is more (less) efficacious in the importable sector. “In the real world there is no simple dividing line between trade and monetary issues.” Krugman and Obstfeld [1994], p. 8.
The development of biological systematics : Antoine-Laurent de Jussieu, nature, and the natural system
A reevaluation of the history of biological systematics that discusses the formative years of the so-called natural system of classification in the eighteenth and nineteenth centuries. Shows how classifications came to be treated as conventions; systematic practice was not linked to clearly articulated theory; there was general confusion over the "shape" of nature; botany, elements of natural history, and systematics were conflated; and systematics took a position near the bottom of the hierarchy of sciences.