An Elementary Proposition concerning the Formation of Customs Unions
نویسندگان
چکیده
Froposition. Ccnsiaer any competitive world trading ewilibrium, with any number of countries and commodities, and with no restrictions whatever on the tariffs and other commodity taxes of individual countries, and with costs of transport fully recognized. Now let any subset of the countries form a customs unton. Then there exists a common tartrvector and a system of lump-sum compensatory payments, involving only members of the union, such that there is an associated tart$ridden competitive equilibrium in which each individual, whether a member of the union or not, is not worse oRthan before theformation of the union2
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