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.

Heckscher Ohlin Ramsey model, preferential trade arrangements, regionalism, trade and growth, trade and investment
Trade (jel F1), Economic Integration (jel F15), Open Economy Macroeconomics (jel F41)
Tinbergen Institute Discussion Paper Series
Tinbergen Institute

François, J.F, & Rombout, M. (2000). Preferential Trade Arrangements, Induced Investment, and National Income in a Heckscher-Ohlin-Ramsey Model (No. TI 00-061/2). Tinbergen Institute Discussion Paper Series. Retrieved from http://hdl.handle.net/1765/6949