The Lerner symmetry theorem is a result used in
international trade
International trade is the exchange of capital, goods, and services across international borders or territories because there is a need or want of goods or services. (see: World economy)
In most countries, such trade represents a significant ...
theory, which states that an
ad valorem
An ''ad valorem'' tax (Latin for "according to value") is a tax whose amount is based on the value of a transaction or of property. It is typically imposed at the time of a transaction, as in the case of a sales tax or value-added tax (VAT). An ...
import tariff
A tariff is a tax imposed by the government of a country or by a supranational union on imports or exports of goods. Besides being a source of revenue for the government, import duties can also be a form of regulation of foreign trade and polic ...
(a percentage of value or an amount per unit) will have the same effects as an export tax. The theorem is based on the observation that the effect on relative prices is the same regardless of which policy (ad valorem tariffs or export taxes) is applied.
The theorem was developed by economist
Abba P. Lerner
Abraham "Abba" Ptachya Lerner (also Abba Psachia Lerner; 28 October 1903 – 27 October 1982) was a Russian-born American-British economist.
Biography
Born in Novoselytsia, Bessarabia, Russian Empire, Lerner grew up in a Jewish family, which e ...
in 1936.
Jagdish N. Bhagwati
Jagdish Natwarlal Bhagwati (born July 26, 1934) is an Indian-born naturalized American economist and one of the most influential trade theorists of his generation.
He is a University Professor of economics and law at Columbia University and a Seni ...
, Arvind Panagariya
Arvind Panagariya (born 30 September 1952) is an Indian-American economist who is the Jagdish Bhagwati Professor of Indian Political Economy at Columbia University and is also the Director of Deepak and Neera Raj Center on Indian Economic Polic ...
, and T. N. Srinivasan
T. N. Srinivasan, in full Thirukodikaval Nilakanta Srinivasan (27 March 1933 – 11 November 2018), was an Indian economist who had taught and worked in the United States. He was the Professor#Retired faculty 2, Emeritus Samuel C. Park, Jr. Prof ...
, 1998 ''Lectures On International Trade'', 2nd Edition, MIT Press
Description
and ch. 12, sect. 12-6, Lerner Symmetry Theorem, scrollable preview, pp
215-19.
/ref>
Notes
References
Economics theorems
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