TRADE CREATION AND TRADE DIVERSION UNDER MERCORSUR: A GLOBAL INTERTEMPORAL GENERAL EQUILIBRIUM ANALYSIS

A multi-region, multi-sector global intertemporal general equilibrium model is constructed to analyze dynamic adjustments following the establishment of the Southern Common Market (MERCOSUR). The study focuses on regional trade integration effects as well as third party spillover effects. By taking into account both transitional and steady state adjustments in consumption, production, and investments, we observe significant shifts of trade diversion away from the non-member trading partners to the member countries. We also find that, following the MERCOSUR's common external tariffication, growth of intra trade would likely be accompanied by increases in trade between Mercosur and other countries.


Issue Date:
1997
Publication Type:
Working or Discussion Paper
PURL Identifier:
http://purl.umn.edu/13977
Total Pages:
41
Series Statement:
Staff Paper P97-4




 Record created 2017-04-01, last modified 2017-08-23

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