Lack of Credibility and Tariff Reforms
How would your answers to exercises 11.1 and 11.2 change if \(\tau_t\) was a tax only on consumption of tradables (i.e., a trade tariff)? Provide a quantitative answer and intuition.
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---
title: "Exercise 11.3"
subtitle: "Lack of Credibility and Tariff Reforms"
---
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## Problem
How would your answers to exercises 11.1 and 11.2 change if $\tau_t$ was a tax only on consumption of tradables (i.e., a trade tariff)? Provide a quantitative answer and intuition.
## Answer
_No solution has been posted yet. If you have a solution, we invite you to share it in the comment box at the bottom of this page._