Trade Policy and Illegal Immigration
AbstractWe use a version of the Meade model to consider the effects of interdependent import tariffs in the presence illegal immigration. First, we consider the small union case and derive the Nash tariff equilibrium for two potential members of a Preferential Trade Agreement (PTA). We analyze conditions under which a movement from the Nash equilibrium to complete intra-bloc tariff elimination (FTA) is likely to be welfare augmenting. The paper also considers how reduction of the external tariff may impact the Nash equilibrium tariffs of the potential bloc members. The analysis is extended to the large union case to consider the conditions under which terms of trade of bloc members improve with respect to the non-member nation(s).
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Bibliographic InfoPaper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 1568.
Length: 28 pages
Date of creation: Apr 2005
Date of revision:
Publication status: published in: International Economics and Finance Journal, 2007, 2(1-2), 51-66
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Other versions of this item:
- F11 - International Economics - - Trade - - - Neoclassical Models of Trade
- F22 - International Economics - - International Factor Movements and International Business - - - International Migration
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- Ethier, Wilfred J, 1986. "Illegal Immigration: The Host-Country Problem," American Economic Review, American Economic Association, vol. 76(1), pages 56-71, March.
- Bond, Eric W. & Chen, Tain-Jy, 1987. "The welfare effects of illegal immigration," Journal of International Economics, Elsevier, vol. 23(3-4), pages 315-328, November.
- Pia M. Orrenius, 2001. "Illegal immigration and enforcement along the U.S.-Mexico border; an overview," Economic and Financial Policy Review, Federal Reserve Bank of Dallas, issue Q I, pages 2-11.
- Panagariya, Arvind & Krishna, Pravin, 2002. "On necessarily welfare-enhancing free trade areas," Journal of International Economics, Elsevier, vol. 57(2), pages 353-367, August.
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