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Preferential Trade Arrangements, Induced Investment, and National Income in a Heckscher-Ohlin-Ramsey Model

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Listed:
  • Joseph Francois

    (Erasmus University Rotterdam, and CEPR)

  • M. Rombout

    (Erasmus University Rotterdam)

Abstract

We develop a Heckscher-Ohlin-Ramsey model, combining dual techniqueswith classic geometric techniques fromtrade theory. This framework is used to explore the long-run generalequilibrium effects of regional integration(preferential trade agreements). Emphasis is placed on positivemechanics related to adjustment in the capitalstock, long-run changes in the pattern in trade, and the implicationsfor changes in long-run (steady-state)national income. The importance of relative country size and thedynamic implications for third countries are alsoaddressed.

Suggested Citation

  • Joseph Francois & M. Rombout, 2000. "Preferential Trade Arrangements, Induced Investment, and National Income in a Heckscher-Ohlin-Ramsey Model," Tinbergen Institute Discussion Papers 00-061/2, Tinbergen Institute.
    • Handle: RePEc:tin:wpaper:20000061
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    References listed on IDEAS

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    More about this item

    Keywords

    regionalism; trade and investment; preferential trade arrangements; Heckscher Ohlin Ramsey model; trade and growth;
    All these keywords.

    JEL classification:

    • F15 - International Economics - - Trade - - - Economic Integration
    • F41 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Open Economy Macroeconomics
    • F1 - International Economics - - Trade

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