Global Production Networks and Regional Integration
Sven Arndt ()
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Sven Arndt: Lowe Institute of Political Economy, Claremont McKenna College
No 301, Working Papers from Lowe Institute of Political Economy
This paper examines the implications of cross-border production fragmentation in the context of regional integration, using both general- and partial-equilibrium approaches. It shows the conditions under which fragmentation converts a trade-diverting FTA into a trade creating one. It assesses the effect of fragmentation on the balance of payments and the sensitivity of trade flows to exchange-rate changes.
Keywords: fragmentation; exchange-rate elasticities (search for similar items in EconPapers)
JEL-codes: F11 F21 F31 (search for similar items in EconPapers)
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