Concertina Reforms with International Capital Mobility
17 Pages Posted: 28 Dec 2006
There are 2 versions of this paper
Concertina Reforms with International Capital Mobility
Date Written: October 2006
Abstract
We show that the standard concertina result for tariff reforms -- i.e. lowering the highest tariff increases welfare -- no longer holds in general if we allow for international capital mobility. The result can break down if the good whose tariff is lowered is not capital intensive. If the concertina reform lowers welfare it lowers market access as well, thereby compromising a second goal that is typically connected with trade liberalisation.
Keywords: Trade policy reform, international factor mobility, welfare, market access
JEL Classification: F11, F13, F15
Suggested Citation: Suggested Citation
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