TY  - JOUR
AU  - Engel,Charles
AU  - Kletzer,Kenneth
TI  - Tariffs, Saving and the Current Account
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 1869
PY  - 1986
Y2  - March 1986
UR  - http://www.nber.org/papers/w1869
L1  - http://www.nber.org/papers/w1869.pdf
N1  - Author contact info:
Charles Engel
Department of Economics
University of Wisconsin
1180 Observatory Drive
Madison, WI  53706-1393
Tel: 608/262-3697
Fax: 608/262-2033
E-Mail: cengel@ssc.wisc.edu

Kenneth Kletzer
University of California, Santa Cruz
Department of Economics
217 Social Sciences 1
Santa Cruz, CA  95064
Tel: 408-459-3407
E-Mail: kkletzer@cats.ucsc.edu
AB  - We investigate the effects of higher tariffs on the current account.Tariffs may increase or decrease investment depending on the capital intensity of the sector protected. We find that ther esponse of saving to tariffs issensitive to the modelling of saving behavior. In a model in which Consumers' discount rate varies endogenously (in the Uzawa preference form), saving fallswith higher tariffs. This result may, however, be reversed in the Blanchard-Yaarj type model in which consumers have uncertain lifetimes. We find that in both models the response of saving depends on a production distortion effect which changes steady-state income and an effect on steady-state expenditures.
ER  -