Welfare and Customs Unions
NBER Working Paper No. 3476
This paper proposes that Viner's celebrated trade diversion and trade creation terminology for the customs union problem be abandoned. As the alternative is offered a welfare calculus based upon the terms-of-trade and volume-of-trade taxonomy from the theory of tariffs. The paper discusses, by application of this calculus, the two outstanding controversies in the theory of customs unions.
Document Object Identifier (DOI): 10.3386/w3476
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