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Public Economics

1971

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Import Controls On Foreign Oil: Tariff Or Quota?, George A. Hay Sep 1971

Import Controls On Foreign Oil: Tariff Or Quota?, George A. Hay

Cornell Law Faculty Publications

During the recent deliberation of the Cabinet Task Force on Oil Import Controls, considerable attention was devoted to the question whether, regardless of the level of imports which should be allowed, the control should take the form of a quota or a tariff. Occasionally reference was made to a well-known equivalence theorem which holds that when there is perfect competition in the product market a tariff will generate a volume of imports which, if alternatively set as a quota, produces an identical discrepancy between foreign and domestic prices. Therefore, other than the transfer of revenues from quota holders to the ...