publication . Preprint . 2001

The Optimal Tax on Antebellum U.S. Cotton Exports

Douglas A. Irwin;
Open Access
  • Published: 01 Dec 2001
The United States produced about 80 percent of the world's cotton in the decades prior to the Civil War. How much monopoly power did the United States possess in the world cotton market and what would have been the effect of an optimal export tax? This paper estimates the elasticity of foreign demand for U.S. cotton exports and uses the elasticity in a simple partial equilibrium model to calculate the optimal export tax and its effect on prices, trade, and welfare. The results indicate that the export demand elasticity for U.S. cotton was about -1.7 and that the optimal export tax of about 50 percent would have raised U.S. welfare by about $6 million, about 0.1 ...
free text keywords: jel:F1, jel:N3

Lebergott, Stanley. “Why the South Lost: Commercial Purpose in the Confederacy, 1861-1865.” Journal of American History 70 (June 1983): 58-74.

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