The Role of Country Size and Returns to Scale in Empirical Assessments of Economic Integration: The Case of Spain
AbstractEmpirical assessments of trade policy in single-country models have addressed extensively the assumption of increasing returns to scale versus constant returns to scale, but the alternative assumption of small open economy versus large open economy has not received much attention. This paper provides an evaluation of the relevance of both assumptions (i. e., returns to scale and country size) when analyzing a process of economic integration for a medium-size economy. We conclude that the often neglected country-size assumption might be more relevant for the empirical results than returns to scale.
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Bibliographic InfoPaper provided by Departamento de Economía - Universidad Pública de Navarra in its series Documentos de Trabajo - Lan Gaiak Departamento de Economía - Universidad Pública de Navarra with number 0005.
Length: 27 pages
Date of creation: 2000
Date of revision:
Publication status: Published in
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Find related papers by JEL classification:
- D58 - Microeconomics - - General Equilibrium and Disequilibrium - - - Computable and Other Applied General Equilibrium Models
- F15 - International Economics - - Trade - - - Economic Integration
- F17 - International Economics - - Trade - - - Trade Forecasting and Simulation
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