It is shown by example that there are situations in which free trade is Pareto-superior to autarky if and only if the compensation of losers is effected by lump-sum transfers and that there are situations in which free trade is Pareto-superior to autarky if and only if compensation is not lump-sum. © 1986.
CITATION STYLE
Kemp, M. C., & Wan, H. Y. (1986). Gains from trade with and without lump-sum compensation. Journal of International Economics, 21(1–2), 99–110. https://doi.org/10.1016/0022-1996(86)90007-3
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