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International Capital Mobility and the Costs of U.S. Import Restraints

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  • de Melo, Jaime
  • Roland-Holst, David

Abstract

This paper evaluates general equilibrium welfare effects of tariffs, quotas, and voluntary export restraints under different assumptions about international capital mobility. We show analytically that, when induced terms-of-trade and rental-rate effects are considered, the qualitative influence of capital mobility on the costs of protection cannot be ascertained unambiguously. simulation estimates for the U.S. indicate the practical importance of capital mobility, as well as of terms-of-trade and rental-rate adjustments, in determining the ultimate welfare effects on import restraints. Copyright 1993 by Blackwell Publishing Ltd.

Suggested Citation

  • de Melo, Jaime & Roland-Holst, David, 1993. "International Capital Mobility and the Costs of U.S. Import Restraints," Review of International Economics, Wiley Blackwell, vol. 1(3), pages 263-271, October.
    • Handle: RePEc:bla:reviec:v:1:y:1993:i:3:p:263-71
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    1. Brecher, Richard A. & Diaz Alejandro, Carlos F., 1977. "Tariffs, foreign capital and immiserizing growth," Journal of International Economics, Elsevier, vol. 7(4), pages 317-322, November.
    2. J. Peter Neary, 1985. "International Factor Mobility, Minimum Wage Rates, and Factor-Price Equalization: A Synthesis," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 100(3), pages 551-570.
    3. Jones, Ronald W., 1984. "Protection and the harmful effects of endogenous capital flows," Economics Letters, Elsevier, vol. 15(3-4), pages 325-330.
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