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In this paper ad valorem and unit taxation are compared on a model that allows for various monopolistic pricing policies, including uniform pricing and all three types of Pigouvian price discrimination. It shows that, for any given unit tax on a non-uniform pricing monopoly (1) there exists an output-neutral ad valorem tax rate that gives rise to a higher tax yield than the unit tax, and (2) there exists an ad valorem tax rate that welfare dominates the unit tax not only in the aggregate sense but also in the Pareto sense.

The present paper develops a general model with one imported, one exported, many non-traded goods, where some factors of production are internationally mobile. Within this framework, the analysis establishes the validity of some earlier results and extends others. That is, (i) a tariff increase reduces the country's welfare; (ii) tariff-induced international factor flows reduce a country's welfare; (iii) an improvement in a country's terms of trade in the presence of a tariff raises its welfare more when factors are internationally mobile than when not; and (iv) with preferential trading agreements, trade creation always improves the country's welfare, while trade diversion may or may not.

A computable general equilibrium model is used to examine effects of removing U.S. tariff and non-tariff barriers to trade. The model differs from traditional disaggregated trade models in its attention to intertemporal decision making, adjustment dynamics, and international capital mobility. Unilateral elimination of tariffs would reduce the welfare of U.S. households by 0.4 per cent. Elimination of quantitative restrictions, in contrast, would increase U.S. welfare by 1.1 per cent. The international cross-ownership of capital associated with internationally mobile capital significantly influences the distribution of capital gains and losses from trade liberalization. Disregarding cross-ownership leads to understatement of the domestic welfare losses from tariff removal and overstatement of the domestic welfare gains from eliminating quantitative restrictions.