Regional Trading Arrangements: Natural or Super-Natural?
This paper summarizes recent research by the authors on the effects of free trade areas (FTAs). Within our model, which emphasizes inter-continental transport costs, several conclusions arise. (1) FTAs are likely to be detrimental over a moderate range of parameter values, even if drawn along natural regional lines. (2) A small margin of preferences for neighbors is beneficial. (3) Optimal preferences depend on the parameters, particularly on transport costs. (4) If preferences are raised further, they enter the zone of negative returns to regionalization, and eventually the super-natural zone, where welfare is lower than under the MFN status quo. Estimates from the gravity model suggest the world system may already be in the super-natural zone. The core model leaves out many factors. But we have pursued a variety of extensions by now. Perhaps the two most important are generalizing the highly stylized model of trade (to include factor endowments), and relaxing the assumption that the inter-bloc level of tariffs remains fixed. In the latter case, allowing tariffs to be endogenous yields a much more optimistic outlook for the effects of FTAs.
(This abstract was borrowed from another version of this item.)
To our knowledge, this item is not available for
download. To find whether it is available, there are three
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.
|Date of creation:||01 Jan 1996|
|Date of revision:|
|Contact details of provider:|| Postal: |
Web page: http://www.haas.berkeley.edu/groups/iber/wps/ciderwp.htm
More information through EDIRC
|Order Information:|| Postal: IBER, F502 Haas Building, University of California at Berkeley, Berkeley CA 94720-1922|
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Antonio Spilimbergo & Ernesto Stein, 1996.
"The Welfare Implications of Trading Blocs among Countries with Different Endowments,"
NBER Working Papers
5472, National Bureau of Economic Research, Inc.
- Antonio Spilimbergo & Ernesto Stein, 1998. "The Welfare Implications of Trading Blocs among Countries with Different Endowments," NBER Chapters, in: The Regionalization of the World Economy, pages 121-152 National Bureau of Economic Research, Inc.
- Antonio Spilimbergo & Ernesto H. Stein, 1996. "The Welfare Implications of Trading Blocs among Countries with Different Endowments," IDB Publications (Working Papers) 6860, 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.
- Jeffrey A. Frankel & Shang-Jin Wei, 1998.
"Open Regionalism in a World of Continental Trade Blocs,"
IMF Working Papers
98/10, International Monetary Fund.
- Shang-Jin Wei & Jeffrey A. Frankel, 1998. "Open Regionalism in a World of Continental Trade Blocs," IMF Staff Papers, Palgrave Macmillan, vol. 45(3), pages 440-453, September.
- Shang-Jin Wei & Jeffrey A. Frankel, 1995. "Open Regionalism in a World of Continental Trade Blocs," NBER Working Papers 5272, National Bureau of Economic Research, Inc.
- Frankel, Jeffrey & Stein, Ernesto & Wei, Shang-jin, 1995. "Trading blocs and the Americas: The natural, the unnatural, and the super-natural," Journal of Development Economics, Elsevier, vol. 47(1), pages 61-95, June.
- Jeffrey A. Frankel, 1998. "The Regionalization of the World Economy," NBER Books, National Bureau of Economic Research, Inc, number fran98-1, July.
- Wonnacott, Paul & Wonnacott, Ronald, 1981. "Is Unilateral Tariff Reduction Preferable to a Customs Union? The Curious Case of the Missing Foreign Tariffs," American Economic Review, American Economic Association, vol. 71(4), pages 704-14, September.
When requesting a correction, please mention this item's handle: RePEc:ucb:calbcd:c96-059. 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: (Christopher F. Baum)
If references are entirely missing, you can add them using this form.