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Title: Concertina Reforms with International Capital Mobility

Author(s): Udo Kreickemeier and Pascalis Raimondos

Publication Date: October 2006

Keyword(s): international factor mobility, market access, trade policy reform and welfare

Programme Area(s): International Trade and Regional Economics

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.

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Bibliographic Reference

Kreickemeier, U and Raimondos, P. 2006. 'Concertina Reforms with International Capital Mobility'. London, Centre for Economic Policy Research. https://cepr.org/active/publications/discussion_papers/dp.php?dpno=5888