The Kemp-Wan Proposition under Increasing Returns to Scale and Oligopolistic Competition


We show that the Kemp-Wan proposition concerning the formation of customs union holds under conditions of imperfect competition and increasing returns.

*An earlier version of the present paper was presented at ISER, Osaka University, and 1997 IEFS Japan Meeting, Kobe University. We thank T. Furusawa, J. Iritani, K. Kuga, K. Mino, Y. Ono, K. Shimomura and T. Saijo for valuable comments and suggetions.

Murray C. KEMP
University of New South Wales

Research Institute for Economics and Business Administration
Kobe University
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