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Trade policies, concentration, growth and welfare

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  • González-Val, Rafael
  • Lanaspa, Luis
  • Pueyo, Fernando

Abstract

The aim of this paper is to analyse, through a theoretical model, the effects that the trade integration of two countries may have on industrial location, growth and welfare. The conclusions reached finally depend both on whether the import or the export costs are affected by the trade policies on which the integration process is based and on whether the rich or the poor country introduces them. In general, when integration leads to an increase of industrial concentration in the rich country, the growth rate increases and welfare improves in both countries. If integration means that industry moves to the poor country, the growth rate decreases; in spite of this, in this case the poor country can also improve its welfare.

Suggested Citation

  • González-Val, Rafael & Lanaspa, Luis & Pueyo, Fernando, 2009. "Trade policies, concentration, growth and welfare," Economic Modelling, Elsevier, vol. 26(6), pages 1355-1364, November.
    • Handle: RePEc:eee:ecmode:v:26:y:2009:i:6:p:1355-1364
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    More about this item

    Keywords

    Trade integration Industrial location Growth Welfare;

    JEL classification:

    • H54 - Public Economics - - National Government Expenditures and Related Policies - - - Infrastructures
    • F15 - International Economics - - Trade - - - Economic Integration
    • R12 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Size and Spatial Distributions of Regional Economic Activity; Interregional Trade (economic geography)
    • F43 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Economic Growth of Open Economies

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