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Title: |
International Investment, Taxes, and Welfare |
| Author: |
Dung, Tran Huu |
| Author
Affiliation: |
Wright St U |
| Source: |
International Economic Journal, Spring 1989, v. 3, no. 1, pp. 63-79 |
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Publication Date: |
Spring 1989 |
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Abstract: |
This paper extends the Kemp-Jones model of
international trade and investment to include consumption and production
taxes in addition to investment and trade taxes. The generalized model
is employed to examine the effects of capital flows in the presence of a
given set of taxes, of foreign ownership in the absence of ongoing
capital movements, as well as to derive the optimal policy. Among the
more noteworthy results are (1) immiserizing foreign investment could
occur even when tariff is absent, (2) perverse welfare effects could be
experienced by a country which has resources employed abroad, and (3)
optimal policy generally requires no fewer than three independent
instruments. |
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