The Welfare Implications of Trading Blocs among Countries with Different Endowments
In: The Regionalization of the World Economy
In this paper, we present a model where trade is motivated both by preference for variety and comparative advantages. We use this framework to analyze the welfare implications of trading blocs among countries with different endowments with and without transportation costs. In this framework, we address the following issues: a) the welfare implications of the consolidation of the world into a few trading blocs; b) the different incentives that rich and poor countries have in choosing their partners in trade arrangements; c) whether the welfare consequences of continental preferential trade arrangements depend on the relative endowments.
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- Bond, E.W. & Syropoulos, C., 1993.
"Optimality and Stability of Regional Trading Blocs,"
5-93-2, Pennsylvania State - Department of Economics.
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- Ernesto Stein & Jeffrey Frankel, 1994. "The welfare implications of continental trading blocs in a model with transport costs," Pacific Basin Working Paper Series 94-03, Federal Reserve Bank of San Francisco.
- Antonio Spilimbergo, 1997.
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6865, Inter-American Development Bank.
- Stern, R.M. & Deardorff, A.V., 1992. "Multilateral Trade Negociations and Preferential Trading Arrangements," Working Papers 307, Research Seminar in International Economics, University of Michigan.
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