A NEW APPROACH TO EVALUATING TRADE-POLICY

This paper introduces a new index number, the Trade Restrictiveness In dex, which measures the restrictiveness of a system of trade protectio n. The index is a general equilibrium application of the distance func tion and answers the question: ''What uniform set of trade restriction s is equivalent (in welfare terms) to the initial protective structure ?'' The index is applicable to both tariffs and quotas and permits int ernational and intertemporal comparisons. The index is operational and we provide two empirical examples to illustrate its applicability and to show its superiority to commonly used measures.