Towards a Common Market: Factor Mobility in a Customs Union
This paper examines whether the member countries of a customs union would gain from moving towards the next stage of economi c integration, the common market. When the set of common external tar iffs is not chosen optimally, increased factor mobility may reduce th e welfare of the customs union. However, common market formation is t he best policy when a customs union of any size sets its tariffs to t he appropriate levels.
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Volume (Year): 21 (1988)
Issue (Month): 3 (August)
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