ABSTRACT
Whether or not tariffs and quotas yield equivalent effects has been important at both theoretical and empirical levels. The study of the equivalence of tariffs and quotas was developed by Bhagwati (1965). Since then the study has been extended principally in two ways. One way is to relax the assumptions of perfect competition in production, export, import and quotaholding, and/or to extend the definition of equivalence (Bhagwati 1965, 1968; Shibata 1968; Yadav 1968; McCulloch, 1973). Another way is to introduce uncertainty about demand and supply in two trading countries, and to compare the welfare implications of tariffs and quotas (for example, Fishelson and Flatters, 1975; Peicovits, 1976; Dasgupta and Stiglitz, 1977; Young 1979, 1980).
