Trade is affected not only by taxes and subsidies that affect producers and consumers of goods, but also, indirectly, by taxes and subsidies that affect nontraded goods or factors of production. The authors show how the Trade Restrictiveness Index (TRI) may be extended to incorporate these types of distortions. Again, the value of the TRI gives the equiproportionate change in the prices of traded goods, which would compensate for a given change in all distortions, both in traded and nontraded...Expand abstract
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Domestic distortions and international trade.
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