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The Impact of Trade Liberalization on the Price Level of Thailand's Manufacturing Products

並列摘要


This paper aims to determine whether the trade liberalization leads to lower equilibrium price in the domestic market, especially in the sectors that have more price-setting power. The main empirical finding is that trade liberalization has an effect on domestic price, which is a decrease in tariff leads to a fall in domestic price, ceteris paribus. And the more pricesetting power the sectors have, the stronger the impact. Empirical analyses are done using fixed effect 2SLS method. As a result, this suggests that one way to improve the welfare of consumers is that the policymaker can reduce the tariff in order to decrease the domestic prices.

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