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How Often Are Propositions on the Effects of Customs Unions Theoretical Curiosa and When Should They Guide Policy?

  • Lisandro Abrego
  • Raymond Riezman
  • John Whalley

This paper uses computational techniques to assess whether or not various propositions that have been advanced as plausible in the literature on Customs Unions (or other regional trade agreements) may actually hold. The idea is to make probabilistic statements as to whether propositions of interest might hold, rather than to restrict assumptions so they unambiguously hold. Our aim is to blend theory and numerical simulation and go beyond the ambiguous analytically derived propositions that dominate the theoretical literature so as to assess the likelihood of propositions holding for particular model specifications.

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Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 8304.

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Date of creation: May 2001
Date of revision:
Publication status: published as Abrego, Lisandro, Raymond Riezman and John Whalley. "How Often Are Propositions On The Effects Of Regional Trade Agreements Theoretical Curiosa?," Journal of International Economics, 2006, v68(1,Jan), 59-78.
Handle: RePEc:nbr:nberwo:8304
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  1. Kehoe, Timothy J, 1980. "An Index Theorem for General Equilibrium Models with Production," Econometrica, Econometric Society, vol. 48(5), pages 1211-32, July.
  2. Carlo Perroni & John Whalley, 1994. "The New Regionalism: Trade Liberalization or Insurance?," NBER Working Papers 4626, National Bureau of Economic Research, Inc.
  3. Riezman, Raymond, 1979. "A 3 x 3 model of customs unions," Journal of International Economics, Elsevier, vol. 9(3), pages 341-354, August.
  4. Raymond Riezman, 1999. "Can Bilateral Trade Agreements Help Induce Free Trade," Canadian Journal of Economics, Canadian Economics Association, vol. 32(3), pages 751-766, May.
  5. Riezman, Raymond, 1985. "Customs unions and the core," Journal of International Economics, Elsevier, vol. 19(3-4), pages 355-365, November.
  6. Kemp, Murray C. & Wan, Henry Jr., 1976. "An elementary proposition concerning the formation of customs unions," Journal of International Economics, Elsevier, vol. 6(1), pages 95-97, February.
  7. Perroni, Carlo & Whalley, John, 1996. "How Severe Is Global Retaliation Risk under Increasing Regionalism?," American Economic Review, American Economic Association, vol. 86(2), pages 57-61, May.
  8. Kowalczyk, Carsten, 1989. "Trade Negotiations and World Welfare," American Economic Review, American Economic Association, vol. 79(3), pages 552-59, June.
  9. John Kennan & Raymond Riezman, 2013. "Optimal Tariff Equilibria with Customs Unions," World Scientific Book Chapters, in: International Trade Agreements and Political Economy, chapter 5, pages 53-66 World Scientific Publishing Co. Pte. Ltd..
  10. R. G. Lipsey & Kelvin Lancaster, 1956. "The General Theory of Second Best," Review of Economic Studies, Oxford University Press, vol. 24(1), pages 11-32.
  11. Shoven, John B. & Whalley, John, 1974. "On the computation of competitive equilibrium on International markets with tariffs," Journal of International Economics, Elsevier, vol. 4(4), pages 341-354, November.
  12. Hamilton, Robert W & Whalley, John, 1985. "Geographically Discriminatory Trade Arrangements," The Review of Economics and Statistics, MIT Press, vol. 67(3), pages 446-55, August.
  13. Wooton, Ian, 1986. "Preferential trading agreements: An investigation," Journal of International Economics, Elsevier, vol. 21(1-2), pages 81-97, August.
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