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Is It Possible for a Low Nominal Tariff Rate to Understate

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Is it possible for a low nominal tariff rate to understate the effective rate of protection? What is tariff escalation?


Definitions:

Mere Exposure Effect

A psychological phenomenon by which people tend to develop a preference for things merely because they are familiar with them.

Self-Fulfilling Prophecy

A prediction that directly or indirectly causes itself to become true, due to positive feedback between belief and behavior.

Familiar Brand Name

A brand name that is well known among consumers, often because of extensive marketing or long-term presence in the market.

Mere Exposure Effect

A psychological phenomenon whereby people tend to develop a preference for things merely because they are familiar with them.

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