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Concertina Reforms with International Capital Mobility

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  • Kreickemeier, Udo

    (Department of Economics, Copenhagen Business School)

  • Raimondos-Møller, Pascalis

    (Department of Economics, Copenhagen Business School)

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. JEL-Classification: F11, F13, F15 Key words: Trade Policy Reform, International Factor Mobility, Welfare, Market Access

Suggested Citation

  • Kreickemeier, Udo & Raimondos-Møller, Pascalis, 2006. "Concertina Reforms with International Capital Mobility," Working Papers 05-2006, Copenhagen Business School, Department of Economics.
    • Handle: RePEc:hhs:cbsnow:2006_005
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    • G10 - Financial Economics - - General Financial Markets - - - General (includes Measurement and Data)

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