Preferential Trade Arrangements, Induced Investment, and National Income in a Heckscher-Ohlin-Ramsey Model

Joseph Francois

No 2535, CEPR Discussion Papers from Centre for Economic Policy Research

Abstract: We develop a Heckscher-Ohlin-Ramsey model, combining dual techniques with classic geometric techniques from trade theory. This framework is used to explore the long-run general equilibrium effects of regional integration (preferential trade agreements). Emphasis is placed on positive mechanics related to adjustment in the capital stock, long-run changes in the pattern in trade, and the implications for changes in long-run (steady-state) national income. The importance of relative country size and the dynamic implications for third countries are also addressed.

Keywords: Regionalism; Trade and investment; Preferential trade arrangements; Heckscher ohlin ramsey model; Trade and growth (search for similar items in EconPapers)
JEL-codes: F10 F15 F41 (search for similar items in EconPapers)
Date: 2000-08
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Working Paper: Preferential Trade Arrangements, Induced Investment, and National Income in a Heckscher-Ohlin-Ramsey Model (2000)
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