Rain, Agriculture, and Tariffs
This paper examines whether and how
rainfall shocks affect tariff setting in the agricultural
sector. In a model of strategic trade policy, the authors
show that the impact of a negative rainfall shock on optimal
import tariffs is generally ambiguous, depending on the
weight placed by the domestic policy maker on tariff
revenue, profits and the consumer surplus. The more weight
placed on domestic profits, the more likely it is that the