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in 

economics, the Metzler paradox (named after the American economist Lloyd Metzler) is the


theoretical possibility that the imposition of a tariff on imports may reduce the relative internal
price of that good.
It was proposed by Lloyd Metzler in 1949 upon examination of tariffs within the Heckscher–Ohlin
model.
SST states that an ad-valorem import tariff will bring about a more than proportionate rise in the
prices of the corresponding intensive factor in that industry. In this argument, they assumed
implicitly that the import tariff would increase the relative prices of imports in the domestic
market.
L A Metzler pointed out that an ad-valorem import tariff has two effects on the domestic price of
imports
1. On the one hand, the tariff itself represents a direct increase in import prices
2. On the other hand, a resulting reduction in the demand for imports decreases the foreign
prices of their goods relative to the corresponding prices for export goods
Whether a tariff increases or reduces the prices of the intensive factor of the import industry
(which is usually a scarce factor of production in the home country) seems to depend upon which
of these force is stronger.
Metzler asserts that tariff may not increase the relative domestic price of imports if ‘n’ the foreign
elasticity of demand for the country’s export is less than 1-k at equilibrium. Where k is mpm.
Under these circumstances, the effect of tariff upon the distribution of income is exactly opposite
to the conclusion reached by SST. This is also called Metzler paradox
The strange result could occur if the exporting country's offer curve is very inelastic.

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