Baumol-tobin and the welfare costs of national security border delays
By: Hui Huang, John Whalley
Contributors: Whalley, John; National Bureau of Economic Research
Series: NBER working paper series -- working paper 12296; Working paper series (National Bureau of Economic Research : Online) -- working paper no. 12296.
Publisher: National Bureau of Economic Research
Published: 2006
Place of publication: Cambridge, MA
Language: eng
Format: [electronic resource] /
Description: "The implications of national security related procedures for trade flows at border points in OECD countries has become a major topic of commentary in popular press.  We discuss whether the economic costs of border delays are represented solely by time spent in awaiting processing.  This has been the basis of calculations in Canada-US-Ontario (2004) and Ontario Chamber of Commerce (2004, 2005) of advalorem equivalent tariff representations of the time delays involved.  While time can be a significant part of the social cost of security related delays in customs clearance, added costs also arise from the behavioral response to delays and looking only at the time delays at the border can be misleading.  We use a formulation where border delays occur with certainty and add to the fixed costs of importing in any period.  We develop analytics for the case where there is endogeneity both in the frequency of transactions and in the size of individual transactions across the border in the tradition of the well known Baumol (1952) and Tobin (1952) inventory theoretical analysis of the demand for money"--National Bureau of Economic Research web site.
Notes: Title from PDF file as viewed on 6/28/2006.

Includes bibliographical references.

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