Capital Movements and the Political Economy of trade Policy
AbstractConsidering a time consistent policy in a two-period political economy model of trade policy, where foreign capital is endogenously determined, the tariff and the level of foreign capital would be higher with external debt than with foreign direct investment. As foreign direct investment is remunerated at the marginal productivity of capital, an increase of the tariff increases its remuneration, increasing also the welfare costs of the tariff. Foreign direct investment can lead to free trade.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by DELTA (Ecole normale supérieure) in its series DELTA Working Papers with number 2002-01.
Date of creation: 2002
Date of revision:
Other versions of this item:
- Gomes Neto Delfim, 2006. "Capital Movements and the Political Economy of Trade Policy," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 6(1), pages 1-33, August.
- F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
- F21 - International Economics - - International Factor Movements and International Business - - - International Investment; Long-Term Capital Movements
- F34 - International Economics - - International Finance - - - International Lending and Debt Problems
This paper has been announced in the following NEP Reports:
You can help add them by filling out this form.
CitEc Project, subscribe to its RSS feed for this item.
- Emily Blanchard, 2006.
"Reevaluating the Role of Trade Agreements: Does Investment Globalization Make the WTO Obsolete?,"
CESifo Working Paper Series
1735, CESifo Group Munich.
- Blanchard, Emily J., 2010. "Reevaluating the role of trade agreements: Does investment globalization make the WTO obsolete?," Journal of International Economics, Elsevier, vol. 82(1), pages 63-72, September.
- Cole, Matthew T. & Davies, Ronald B., 2011. "Strategic tariffs, tariff jumping, and heterogeneous firms," European Economic Review, Elsevier, vol. 55(4), pages 480-496, May.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: ().
If references are entirely missing, you can add them using this form.