The Welfare Implications of Trading Blocs Among Countries with Different Endowments

54 Pages Posted: 11 Jun 2000

See all articles by Antonio Spilimbergo

Antonio Spilimbergo

International Monetary Fund (IMF) - Research Department; Centre for Economic Policy Research (CEPR); University of Michigan at Ann Arbor - The William Davidson Institute

Ernesto Stein

Inter-American Development Bank (IDB)

Multiple version iconThere are 3 versions of this paper

Date Written: March 1996

Abstract

In this paper, we present a model where trade is motivated both by preference for variety and comparative advantages. We use this framework to analyze the welfare implications of trading blocs among countries with different endowments with and without transportation costs. In this framework, we address the following issues: a) the welfare implications of the consolidation of the world into a few trading blocs; b) the different incentives that rich and poor countries have in choosing their partners in trade arrangements; c) whether the welfare consequences of continental preferential trade arrangements depend on the relative endowments.

Suggested Citation

Spilimbergo, Antonio and Stein, Ernesto Hugo, The Welfare Implications of Trading Blocs Among Countries with Different Endowments (March 1996). NBER Working Paper No. w5472, Available at SSRN: https://ssrn.com/abstract=225514

Antonio Spilimbergo (Contact Author)

International Monetary Fund (IMF) - Research Department ( email )

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Centre for Economic Policy Research (CEPR)

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United Kingdom

University of Michigan at Ann Arbor - The William Davidson Institute ( email )

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Ann Arbor, MI 48109-1234
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Ernesto Hugo Stein

Inter-American Development Bank (IDB) ( email )

1300 New York Avenue, NW
Research Department
Washington, DC 20577
United States

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