Preferential Trade Arrangements, Induced Investment, and National Income in a Heckscher-Ohlin-Ramsey Model
2000-07-31
Research Paper
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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
- Heckscher Ohlin Ramsey model
- preferential trade arrangements
- trade and growth
- trade and investment
Classifications using
Journal of Economic Literature (JEL) Classification System
Automatically Extracted Terms
- trade
- country
- price
- effect
- capital
- figure
- investment
- income
- country b
- world
- import
- partner
- model
- trade diversion
- tariff
- equation
- equilibrium
- point
- change
- capital stock
