Regional integration and dynamic adjustments: Evidence from gross national product functions for Canada and the United States

Guy Chapda Nana, Bruno Larue and Jean-Philippe Gervais ()

The North American Journal of Economics and Finance, 2012, vol. 23, issue 2, 246-264

Abstract: We estimate a translog Gross National Product function and test for endogenously determined structural change allowing for anticipated and lagged responses to regional trade agreements. We found that Canada embarked on a long transition path prior to the implementation of the Canada-U.S. Trade Agreement, a result reminiscent of Magee's (2008) results concerning RTAs’ trade creation effects. In contrast, the United States experienced an abrupt structural change a year after the North American Free Trade Agreement took effect. This reflects that smaller economies benefitting from larger changes in terms of trade are confronted to more complex adjustment processes than larger economies.

Keywords: GNP function; Regional integration; Structural change; Smooth transition regression; Dynamic adjustments (search for similar items in EconPapers)
JEL-codes: F13 Q17 (search for similar items in EconPapers)
Date: 2012
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Citations: View citations in EconPapers (3)

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Working Paper: Regional Integration and Dynamic Adjustments: Evidence from a Gross National Product Function for Canada and the United States (2010)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:ecofin:v:23:y:2012:i:2:p:246-264

DOI: 10.1016/j.najef.2012.03.007

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