Import Quotas, Foreign Capital and Income Distribution

In: The American economist: journal of the International Honor Society in Economics, Omicron Delta Epsilon, Band 42, Heft 1, S. 95-100

Abstract

This paper shows that unlike a tariff-induced inflow of foreign capital, an import quota-induced inflow of foreign capital will increase the welfare of the host country. This paper also demonstrates the effects of the capital inflow on the income distribution within the host country. The welfare of the capitalist class will decrease whereas the welfare of the labor class will increase within the host country.