To transfer or to destroy

The transfer problem is by now well understood. In an important book Chichilnisky-Heal provide an example of a related paradox — the destroy paradox — in the context of a Walrasian stable economy. It is evident, however, that the paradox depends on the underlying data — tastes, preferences, and net export positions — of the economy. This paper gives necessary and sufficient conditions on the underlying data of a globally Walrasian stable Leontief economy for the occurrence of this paradox. The relationship between the transfer and destroy paradoxes in an economy with Leontief preferences is explored.I am grateful to John Donaldson, Duncan Foley, Giulio Ponte corvo, participants in the Colgate-Hamilton Economics workshop and especially, an associate editor and an anonymous referee of this journal for helpful comments. The usual disclaimers apply.