Aggregating trade distortions

We analyze the properties of tariffrevenue and expenditure aggregators - tariffaggregators that keep expenditure, respectively tariffrevenue constant and, in the case of the second aggregator, we correct the definition. Furthermore, under common assumptions in applied trade, we develop closed-form solutions for the expenditure and tariffrevenue aggregators, which allows for practical applications of these aggregators in empirical trade. We also explore the relations between the trade-weighted average tariff, the expenditure aggregator and the revenue aggregator. We use these aggregators in a standard general equilibrium model for three countries to analyze the welfare gains from trade liberalization and compare the results.