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

Xinshen Diao () and Agapi Somwaru

No 13977, Staff Papers from University of Minnesota, Department of Applied Economics

Abstract: 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.

Keywords: International; Relations/Trade (search for similar items in EconPapers)
Pages: 41
Date: 1997
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (4)

Downloads: (external link)
https://ageconsearch.umn.edu/record/13977/files/p97-04.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:ags:umaesp:13977

DOI: 10.22004/ag.econ.13977

Access Statistics for this paper

More papers in Staff Papers from University of Minnesota, Department of Applied Economics Contact information at EDIRC.
Bibliographic data for series maintained by AgEcon Search ().