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External Shocks, the Real Exchange Rate, and Tax Policy
Author:
Mr. Stephen Tokarick
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Series:
IMF Working Papers
Volume/Issue:
Volume 1994: Issue 088
Language:
English
Publication Date:
01 Aug 1994
DOI:
https://doi.org/10.5089/9781451851090.001
ISBN:
9781451851090
ISSN:
1018-5941
Pages:
36
Keywords:
WP; terms of trade; exchange rate; consumer demand; traded good; terms-of-trade deterioration; trade reform; cross-price effect; world price PWM; exportable good; importable good; import volume; Real exchange rates; Imports; Trade liberalization; Value-added tax; Tariffs
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IMF Working Papers describe research in progress by the author(s) and are published to elicit comments and to encourage debate. The views expressed in IMF Working Papers are those of the author(s) and do not necessarily represent the views of the IMF, its Executive Board, or IMF management.
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This paper uses a computable general equilibrium model of the economy of Trinidad and Tobago to assess the effects of trade liberalization and terms-of-trade shocks on the real exchange rate and the overall fiscal position of the government. The model is also used to evaluate the implications of alternative tax policies designed to offset the increase in the budget deficit of the central government that results from both types of external sector shocks.
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Cover IMF Working Papers
IMF Working Papers
ISSN:
1018-5941
Publisher:
International Monetary Fund