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Tariff change, foreign capital and immiserization A general equilibrium evaluation of the Latin American case

par Mercenier, Jean
Référence Journal of development economics, 26, 1, page (145-162)
Publication Publié, 1987-06

Article révisé par les pairs

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Résumé :

We subject to an empirical test the idea that, in presence of foreign capital, a movement towards free trade may be immiserizing for national factor owners. The evaluation is done for a low-income Latin American region by use of a dynamic multisectoral world general equilibrium model of trade and production which recognizes real wage rigidities. A simplified representation of the system is introduced and partial equilibrium comparative static arguments are used to help the reader to understand the behaviour of the full system. It is shown that a movement towards free trade should be preferred to higher protectionism although, in the short run, a higher national welfare could be achieved by increasing tariffs. © 1987.