IDEAS home Printed from
MyIDEAS: Log in (now much improved!) to save this article

‘Natural’ Trading Blocs: A Closer Look

Listed author(s):
  • Nitsch, Volker


    (Bankgesellschaft Berlin)

It is occasionally argued that the formation of trading blocs between geographi - cally proximate countries should be encouraged because positive welfare effects are more likely to outweigh negative welfare effects. This paper presents a simple d i ff e rentiated products model that allows to test whether the formation of a ‘natural’ trading bloc, first, is indeed increasing world welfare and, second, is welfare-superior to the formation of an ‘unnatural’ trading bloc. Simulations show that, while the removal of trade barriers always improves world welfare, ‘unnatural’ bloc formation may, under some conditions, be welfare-superior to the formation of trading blocs along ‘natural’ lines. The concept of ‘natural’ trad - ing blocs is therefore a misguided prescription.

To our knowledge, this item is not available for download. To find whether it is available, there are three options:
1. Check below under "Related research" whether another version of this item is available online.
2. Check on the provider's web page whether it is in fact available.
3. Perform a search for a similarly titled item that would be available.

Article provided by Center for Economic Integration, Sejong University in its journal Journal of Economic Integration.

Volume (Year): 12 (1997)
Issue (Month): ()
Pages: 433-455

in new window

Handle: RePEc:ris:integr:0058
Contact details of provider: Web page:

More information through EDIRC

No references listed on IDEAS
You can help add them by filling out this form.

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

When requesting a correction, please mention this item's handle: RePEc:ris:integr:0058. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Jong-Eun Lee)

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.

This information is provided to you by IDEAS at the Research Division of the Federal Reserve Bank of St. Louis using RePEc data.