Abstract

A country or group of countries facing a downward-sloping, export demand curve may be able to achieve a net welfare gain through the taxation of exports. A partial equilibrium analysis of this issue applied to the international wheat market is provided in an AJAE article by Carter, Gallini, and Schmitz.' The purpose of this comment is to correct their empirical solution for prices, trade volume, and welfare effects when there is an optimal export tax under a government-controlled exporters' cartel.

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