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Gains from Trade versus Gains from Migration: What Makes Them So Different?
Author(s) -
HAMMOND PETER J.,
SEMPERE JAUME
Publication year - 2006
Publication title -
journal of public economic theory
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.809
H-Index - 32
eISSN - 1467-9779
pISSN - 1097-3923
DOI - 10.1111/j.1467-9779.2006.00256.x
Subject(s) - economics , status quo , pareto principle , microeconomics , pareto optimal , general equilibrium theory , set (abstract data type) , regular polygon , international trade , computer science , mathematics , market economy , operations management , geometry , programming language
Would unrestricted “economic” migration enhance the potential gains from free trade? With free migration, consumers' feasible sets become non‐convex. Under standard assumptions, however, Walrasian equilibrium exists for a continuum of individuals with dispersed ability to afford each of a finite set of possible migration plans. Then familiar conditions ensuring potential Pareto gains from trade also ensure that free migration generates similar supplementary gains, relative to an arbitrary status quo . As with the gains from customs unions, however, wealth may have to be redistributed across international borders.