GEP Research Paper 06/17
Concertina Reforms with International Capital Mobility
Udo Kreickemeier and Pascalis Raimondos-Møller
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.
Issued in June 2006.
This paper is available in PDF format .