Free trade commodities has often been considered to lead to the optimum allocation of resources between countries. If factor returns are not equalized by such trade, further gains can be obtained by allowing national factors access to world markets. But if technology, in the form of blueprints,...

An increased foreign capital inflow into a protected sector is generally immiserizing. We show that if the protected sector produces an intermediate input, positive welfare effects may emerge. A striking result is that it might lead to an increased import-demand for the intermediate input which...