North-South Customs Unions and International Capital Mobility

22 Pages Posted: 20 Apr 2011

See all articles by Eduardo Fernandez-Arias

Eduardo Fernandez-Arias

Inter-American Development Bank (IDB)

Mark M. Spiegel

Federal Reserve Bank of San Francisco - Economic Research Department

Date Written: March 1997

Abstract

This paper examines the implications of a North-South trade accord where investments in the Southern partner nation exhibit country risk. Our analysis demonstrates that North-South trade accords can serve as credibility-enhancing mechanisms that induce additional foreign capital inflows into Southern partner nations. The presence of sovereign risk changes the tradeoffs between trade creation and diversion, enhancing the potential for regional trade accords to increase the welfare of accord members.

Suggested Citation

Fernandez-Arias, Eduardo and Spiegel, Mark M., North-South Customs Unions and International Capital Mobility (March 1997). IDB Working Paper No. 282, Available at SSRN: https://ssrn.com/abstract=1815970 or http://dx.doi.org/10.2139/ssrn.1815970

Eduardo Fernandez-Arias (Contact Author)

Inter-American Development Bank (IDB) ( email )

1300 New York Avenue, NW
Research Department
Washington, DC 20577
United States
202-623-3783 (Phone)
202-623-2481 (Fax)

Mark M. Spiegel

Federal Reserve Bank of San Francisco - Economic Research Department ( email )

101 Market Street
San Francisco, CA 94105
United States
415-974-3184 (Phone)
415-974-2168 (Fax)

HOME PAGE: http://www.frbsf.org/economics/economists/mspiegel.html

Here is the Coronavirus
related research on SSRN

Paper statistics

Downloads
13
Abstract Views
452
PlumX Metrics