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Welfare and Customs Unions

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  • Carsten Kowalczyk
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    Abstract

    This paper proposes that Viner's celebrated trade diversion and trade creation terminology for the customs union problem be abandoned. As the alternative is offered a welfare calculus based upon the terms-of-trade and volume-of-trade taxonomy from the theory of tariffs. The paper discusses, by application of this calculus, the two outstanding controversies in the theory of customs unions.

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    File URL: http://www.nber.org/papers/w3476.pdf
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    Bibliographic Info

    Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 3476.

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    Date of creation: Oct 1990
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    Handle: RePEc:nbr:nberwo:3476

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    1. Riezman, Raymond, 1985. "Customs unions and the core," Journal of International Economics, Elsevier, vol. 19(3-4), pages 355-365, November.
    2. Conway, Patrick J & Appleyard, Dennis R & Field, Alfred J, Jr, 1989. "Trade Agreements vs. Unilateral Tariff Reductions: Evidence from Modeling with a Continuum of Goods," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 30(4), pages 775-94, November.
    3. John Kennan & Raymond Riezman, 1990. "Optimal Tariff Equilibria with Customs Unions," Canadian Journal of Economics, Canadian Economics Association, vol. 23(1), pages 70-83, February.
    4. Riezman, Raymond, 1979. "A 3 x 3 model of customs unions," Journal of International Economics, Elsevier, vol. 9(3), pages 341-354, August.
    5. Appleyard, Dennis R. & Conway, Patrick J. & Field, Alfred Jr., 1989. "The effects of customs unions on the pattern and terms of trade in a Ricardian model with a continuum of goods," Journal of International Economics, Elsevier, vol. 27(1-2), pages 147-164, August.
    6. Kirman, Alan P, 1973. "Trade Diverting Customs Unions and Welfare Improvement: A Comment," Economic Journal, Royal Economic Society, vol. 83(331), pages 890-94, September.
    7. Harry G. Johnson, 1965. "An Economic Theory of Protectionism, Tariff Bargaining, and the Formation of Customs Unions," Journal of Political Economy, University of Chicago Press, vol. 73, pages 256.
    8. Kennan, John & Riezman, Raymond, 1988. "Do Big Countries Win Tariff Wars?," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 29(1), pages 81-85, February.
    9. Wonnacott, Paul & Wonnacott, Ronald, 1984. "How General Is the Case for Unilateral Tariff Reduction?," American Economic Review, American Economic Association, vol. 74(3), pages 491, June.
    10. Bond, Eric W, 1990. "The Optimal Tariff Structure in Higher Dimensions," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 31(1), pages 103-16, February.
    11. Michaely, Michael, 1976. "The assumptions of Jacob Viner's theory of customs unions," Journal of International Economics, Elsevier, vol. 6(1), pages 75-93, February.
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