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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

Abstract: 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)
Date: 2003
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