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Short-run Regional Effects of Alternative Strategies for Economic Integration: The Case of Brazil

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  • Edson Domingues

    ()

  • Eduardo Haddad

    ()

  • Fernando Perobelli

    ()

Abstract

Motivated by both economic and political objectives, Brazil has been pursuing, in recent years, different trade arrangements in an attempt to reinforce strategic impulses for economic development. In this paper, alternative strategies of economic integration are evaluated from the Brazilian perspective. Traditional trade gains and losses are considered in a cost-competitiveness approach, based on relative changes in the industrial cost and demand structures. In the first part of the analysis, a national computable general equilibrium model is used in order to assess the first-round impacts of three alternative trade liberalization scenarios. The main findings indicate that general trade agreements under WTO negotiations are preferable to either the implementation of a free trade area in the Americas or regional agreements involving Mercosur and the European Union. However, each trade arrangement would entail differential structural impacts that serve to different development purposes. In the second part, a Machlup-Goodwin-type interregional model is integrated to the CGE model in order to generate a top-down disaggregation of the national results. Spatial implications of the trade policies are assessed, showing that the trade strategies examined are likely to increase regional inequality in the country.

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File URL: http://www-sre.wu-wien.ac.at/ersa/ersaconfs/ersa01/papers/full/210.pdf
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Bibliographic Info

Paper provided by European Regional Science Association in its series ERSA conference papers with number ersa01p210.

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Date of creation: Aug 2001
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Handle: RePEc:wiw:wiwrsa:ersa01p210

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  1. A. W. Coats, 1996. "Introduction," History of Political Economy, Duke University Press, vol. 28(5), pages 3-11, Supplemen.
  2. Harrison, W Jill & Pearson, K R, 1996. "Computing Solutions for Large General Equilibrium Models Using GEMPACK," Computational Economics, Society for Computational Economics, vol. 9(2), pages 83-127, May.
  3. Adams, Philip D. & Dixon, Peter B. & McDonald, Daina & Meagher, G. A. & Parmenter, Brian R., 1994. "Forecasts for the Australian economy using the MONASH model," International Journal of Forecasting, Elsevier, vol. 10(4), pages 557-571, December.
  4. Hans M. Amman & David A. Kendrick, . "Computational Economics," Online economics textbooks, SUNY-Oswego, Department of Economics, number comp1, Spring.
  5. Venables, Anthony J, 1998. "The Assessment: Trade and Location," Oxford Review of Economic Policy, Oxford University Press, vol. 14(2), pages 1-6, Summer.
  6. Dixon, Peter B. & Parmenter, B.R., 1996. "Computable general equilibrium modelling for policy analysis and forecasting," Handbook of Computational Economics, in: H. M. Amman & D. A. Kendrick & J. Rust (ed.), Handbook of Computational Economics, edition 1, volume 1, chapter 1, pages 3-85 Elsevier.
  7. M. Kohlhaas & K.R. Pearson, 2002. "Introduction to GEMPACK for GAMS Users," Centre of Policy Studies/IMPACT Centre Working Papers ip-79, Victoria University, Centre of Policy Studies/IMPACT Centre.
  8. Leonardo Campos Filho, 1998. "Unilateral Liberalisation and Mercosul: Implications for Resource Allocation," Revista Brasileira de Economia, FGV/EPGE Escola Brasileira de Economia e Finanças, Getulio Vargas Foundation (Brazil), vol. 52(4), pages 601-636, October.
  9. Carlos R. Azzoni, 2001. "Economic growth and regional income inequality in Brazil," The Annals of Regional Science, Springer, vol. 35(1), pages 133-152.
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Cited by:
  1. Fachinello, Arlei Luiz & Ferreira Filho, Joaquim Bento de Souza, 2008. "Análise Dos Reflexos Econômicos Derivados De Surtos Da Gripe Aviária No Brasil Utilizando Um Modelo De Equilíbrio Geral Computável," 46th Congress, July 20-23, 2008, Rio Branco, Acre, Brasil 110071, Sociedade Brasileira de Economia, Administracao e Sociologia Rural (SOBER).
  2. Edson Paulo Domingues & Kênia Barreiro de Souza, 2012. "The Welfare Impacts of Changes in the Brazilian Domestic Work Market," One Pager 180, International Policy Centre for Inclusive Growth.
  3. Edson Paulo Domingues & Mauro Borges Lemos, 2004. "Regional Impacts of Trade Liberalization Strategies in Brazil," ERSA conference papers ersa04p311, European Regional Science Association.

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