Dynamic Gains and Losses from Trade Reform: An Intertemporal General Equilibrium Model of the United States and MERCOSUR

Xinshen Diao () and Agapi Somwaru

No 7473, Bulletins from University of Minnesota, Economic Development Center

Abstract: An intertemporal general equilibrium model of the United States and MERCOSUR is created to analyze the dynamic adjustments in both regions' commodity and capital markets after trade liberalization. Simulation results show that tariff reductions initiated by MERCOSUR have small positive effects on the U.S. production, trade, consumption and investment, and stimulates MERCOSUR's growth, and improves its current account. If tariffs are eliminated by both regions, both regions are better off from points of intertemporal social welfare, international trade, domestic investment, and growth. Agriculture benefits more from trade reform, which implies that ruralagricultural sector might have been a victim of trade protection policies.

Keywords: International; Relations/Trade (search for similar items in EconPapers)
Pages: 47
Date: 1996
References: View complete reference list from CitEc
Citations: View citations in EconPapers (2)

Downloads: (external link)
https://ageconsearch.umn.edu/record/7473/files/edc96-03.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:umedbu:7473

DOI: 10.22004/ag.econ.7473

Access Statistics for this paper

More papers in Bulletins from University of Minnesota, Economic Development Center Contact information at EDIRC.
Bibliographic data for series maintained by AgEcon Search ().