Effects of the Completition of MERCOSUR on the Uruguayan Labor Market. A simulation exercies using a CGE model
The Mercosur was born as an imperfect Customs Union. During the transition phase to a complete Customs Union -starting in 1995-, each country established some exceptions to trade liberalization within the region and to the external common tariff. This paper deals with the possible effects on the Uruguayan labor market of the elimination of those exceptions. With that purpose, the changes in tariffs during the transition are simulated with a Computable General Equilibrium model. The model is specified for the Uruguayan economy but three other regions are considered: Argentina, Brazil and the rest of the world. There are nine sectors in the model, six of which are assumed to work under imperfect competition while the rest are perfectly competitive. In the sectors with imperfect competition a Bertrand type behavior is assumed. The labor market is segmented in skilled and unskilled labor and wages are flexible. The results show that the overall effects on the main variables and on the labor market are not important. The most significant changes are found in trade flows. However, at the sectoral level relevant changes are found in consumption, output, trade and factor allocation in those sectors that are most affected by the intra-zone liberalization or by the complete enforcement of the Common External Tariff.
|Date of creation:||Sep 1999|
|Date of revision:|
|Contact details of provider:|| Postal: |
Phone: (598) 2410-6449
Fax: (598) 2410-6450
Web page: http://www.fcs.edu.uy/subcategoria.php?SubCatId=48&CatId=53
More information through EDIRC
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.:
- Devarajan, Shantayanan & Rodrik, Dani, 1989. "Trade Liberalization in Developing Countries: Do Imperfect Competition and Scale Economies Matter?," American Economic Review, American Economic Association, vol. 79(2), pages 283-87, May.
- Drusilla K. Brown & Alan V. Deardorff & Robert M. Stern, 1992.
"A North American Free Trade Agreement: Analytical Issues and a Computational Assessment,"
The World Economy,
Wiley Blackwell, vol. 15(1), pages 11-30, 01.
- Brown, D.K. & Deardorff, A.V. & Stern, R.M., 1991. "A North American Free Trade Agreement: Analytical Issues and A Computational Assessment," Working Papers 289, Research Seminar in International Economics, University of Michigan.
- Smith, Alasdair & Venables, Anthony J, 1988.
"Completing the Internal Market in the European Community: Some Industry Simulations,"
CEPR Discussion Papers
233, C.E.P.R. Discussion Papers.
- Smith, Alasdair & Venables, Anthony J., 1988. "Completing the internal market in the European Community : Some industry simulations," European Economic Review, Elsevier, vol. 32(7), pages 1501-1525, September.
- Dixit, Avinash K & Stiglitz, Joseph E, 1977.
"Monopolistic Competition and Optimum Product Diversity,"
American Economic Review,
American Economic Association, vol. 67(3), pages 297-308, June.
- Dixit, Avinash K & Stiglitz, Joseph E, 1975. "Monopolistic Competition and Optimum Product Diversity," The Warwick Economics Research Paper Series (TWERPS) 64, University of Warwick, Department of Economics.
- Mercenier, Jean, 1995. "Can "1992" reduce unemployment in Europe? On welfare and employment effects of Europe's move to a single market," Journal of Policy Modeling, Elsevier, vol. 17(1), pages 1-37, February.
- Diao, Xinshen & Somwaru, Agapi, 1996. "Dynamic Gains and Losses from Trade Reform: An Intertemporal General Equilibrium Model of the United States and MERCOSUR," Bulletins 7473, University of Minnesota, Economic Development Center.
- Flores, Renato Jr., 1997. "The gains from MERCOSUL: A general equilibrium, imperfect competition evaluation," Journal of Policy Modeling, Elsevier, vol. 19(1), pages 1-18, February.
When requesting a correction, please mention this item's handle: RePEc:ude:wpaper:2199. 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: (Irene Musio)or (Héctor Pastori)
If references are entirely missing, you can add them using this form.