Working Paper


Frances P. Ruane
J. Peter Neary



protection shadow prices heckscher ohlin samuelson model international trade small open economy cost of capital international capital mobility capital movements

International capital mobility, shadow prices and the cost of protection (1984)

Abstract This paper studies the welfare losses from tariff protection in a general model of a small open economy where some factors are internationally mobile. It is show that, as long as the economy remains incompletely specialised, international factor mobility must raise the cost of protection. This result is illustrated in the context of the specific-factors and Heckscher-Ohlin models. In addition, its relationship to earlier work on immiserising captial inflows on negative shadow prices for factors of production is examined, which allows us to synthesise a number of recent results within a common framework.
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Full list of authors on original publication

Frances P. Ruane, J. Peter Neary

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J. Peter Neary
University College Dublin
Total Publications: 79