This discussion has assumed that the capital stock is unaffected by immigration but,
as has been seen, immigration raises the return to capital and one might expect inflow
of capital as a consequence. The effect of any such inflow, will, of course, be to
counteract the effects on factor returns described above. Indeed if capital is perfectly
internationally mobile then one might assume its value will be fixed by its value on
world markets so that the inflow will continue until the return to capital goes back its
initial value and wages also regain their initial level. In such a scenario, the effect of
immigration will simply be a proportional expansion of production plans with an
associated expansion of tax receipts.4