The deterioration of the terms of trade by a tariff

The paper investigates the classic problem of the effect of a tariff on the terms of trade for a country with monopoly power in trade. It shows that the terms of trade may deteriorate in the presence of a tariff, by using a three-traded-goods model as against the earlier analyses in terms of the two-good model. An earlier analysis by Gruen-Corden of such a model used unnecessarily restrictive assumptions to discuss this problem; the present model is perfectly general.