Welfare and Customs Unions
Working Paper 3476
DOI 10.3386/w3476
Issue Date
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.