This paper focuses on the appropriate measurement of intra-industry trade as indicator of structural adjustment costs. Vertical intra-industry trade is distinguished from horizontal trade on the basis of industrial organisation rather than quality differences. It is argued that existing dynamic versions of the Grubel-Lloyd index reflect horizontal trade only and classify vertical intra-industry trade with inter-industry trade. The paper then proposes a method to distinguish between horizontal and vertical trade and applies these techniques to emerging trade between the EU and the economies of Central and Eastern Europe.
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Paper provided by College Dublin, Department of Political Economy- in its series Papers with number
98/6.
Length: 17 pages Date of creation: 1998 Date of revision: Handle: RePEc:fth:dublec:98/6
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Find related papers by JEL classification: F2 - International Economics - - International Factor Movements and International Business F1 - International Economics - - Trade