"This is a very basic error. International economists almost universally agree that a VAT is neutral with respect to trade. "
Assumptions please !
"An across the board 10% import tax, combined with a 10% export subsidy, offset each other, leaving no net impact on trade. Instead they convert the tax from a production tax to a consumption tax. But it's a consumption tax that applies equally to all goods, whether made domestically, or imported. This is not even a tiny bit controversial."
My guess it's not a slip
He's got an export subsidy where he needs an export tax
And what he's got is the approximate equivalent of a devaluation that is not off set
Devals by trading partners
Where this certainty comes from
The congealed teachings of his mentors
Congealed mangled transposed over the years
in scotts mind vat ( the iron pot variety )
in search of justifications for sky hooked class ideology
This prods a comment
Lots of comp stat theorems get " generalized "
In the eager mind
Assumptions forgotten ?
Well if this above is influenced by say
Lerners symmetry theorem
Not only has he got
The export subsidy part wrong
It's a tax
He's left out trade always in balance
Preferences of citizenry identical
Factors distributed evenly
Tax revenue lump sum per capita
returned to the citizens
Probably much else
It's a model for Jesus sake !
And a beautiful counter intuitive one
Like Ricardo's " implicit "
comparative advantage theorem
He seems to have reached into his virtual file draw and pulled out the consequences of a UUCD
Unilateral un off set
currency devaluation
