Year: 2000
Title:
Preferential Trade Arrangements, Induced Investment, and National Income in a Heckscher-Ohlin Model
JEL: F15, F41
Authors:
J. Francois, Erasmus University
M. Rombout, Tinbergen Institute
Abstract:
We develop a Heckscher-Ohlin-Ramsey model, combining dual techniques with classic geometric techniques from trade theory. This framework is used to explore the long-run general equilibrium effects of regional integration (preferential trade agreements). Emphasis is placed on positive mechanics related to adjustment in the capital stock, long-run changes in the pattern in trade, and the implications for changes in long-run (steady-state) national income. The importance of relative country size and the dynamic implications for third countries are also addressed.
Keywords:
regionalism; trade and investment; preferential trade arrangements; Heckscher Ohlin Ramsey model; trade and growth
Contact address: francois at few.eur.nl
Paper URL: http://www.intereconomics.com/francois/Text9705r.pdf
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