The Welfare Implications of Trading Blocs among Countries with Different Endowments
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.
|Date of creation:||Mar 1996|
|Date of revision:|
|Publication status:||published as The Welfare Implications of Trading Blocs among Countries with Different Endowments , Antonio Spilimbergo, Ernesto Stein. in The Regionalization of the World Economy , Frankel. 1998|
|Contact details of provider:|| Postal: National Bureau of Economic Research, 1050 Massachusetts Avenue Cambridge, MA 02138, U.S.A.|
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- Bond, E.W. & Syropoulos, C., 1993.
"Optimality and Stability of Regional Trading Blocs,"
93-11, Department of Economics, University of Birmingham.
- Bond, E.W. & Syropoulos, C., 1993. "Optimality and Stability of Regional Trading Blocs," Papers 5-93-2, Pennsylvania State - Department of Economics.
- 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.
- 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.
- Levy, Philip I, 1997. "A Political-Economic Analysis of Free-Trade Agreements," American Economic Review, American Economic Association, vol. 87(4), pages 506-19, September.
- Spilimbergo, Antonio, 2000.
"Growth and Trade: The North Can Lose,"
Journal of Economic Growth,
Springer, vol. 5(2), pages 131-46, June.
- Jon D. Haveman, 1996. "Some Welfare Effects of Sequential Customs Union Formation," Canadian Journal of Economics, Canadian Economics Association, vol. 29(4), pages 941-58, November.
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