La devaluación compensada y la tarifa efectiva

Abstract

The object of this note is to show that if a devaluation is accompanied by compensating changes in tariffs which leave domestic prices unchanged (i.e.: a perfectly compensated devaluation), the level –and accordingly the structure- of the effective rate of protection will not be affected. The novelty of the note lies in the fact that in this case the straightforward application of the relation between the pre and postdevaluation level of nominal tariffs to the usual formula of the effective tariff gives the opposite result, namely, that a perfectly compensated devaluation affects the level and structure of effective tariffs. This is so because the usual formula of effective tariffs assumes independence between the prices of products and inputs and the level of nominal tariffs, a faculty assumption in our case. Correct proof of the proposition is presented.