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Department of Economics, Copenhagen Business School Working Paper Series, Department of Economics, Copenhagen Business School

No 05-2006:
Concertina Reforms with International Capital Mobility

Udo Kreickemeier and Pascalis Raimondos-Møller

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. JEL-Classification: F11, F13, F15 Key words: Trade Policy Reform, International Factor Mobility, Welfare, Market Access

Keywords: na; (follow links to similar papers)

JEL-Codes: G10; (follow links to similar papers)

16 pages, January 1, 2006

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