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Discussion Paper Details

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

Author(s): Joseph Francois

Publication Date: August 2000

Keyword(s): Heckscher Ohlin Ramsey Model, Preferential Trade Arrangements, Regionalism, Trade And Growth and Trade And Investment

Programme Area(s): International Trade and Regional Economics

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.

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Bibliographic Reference

Francois, J. 2000. 'Preferential Trade Arrangements, Induced Investment, and National Income in a Heckscher-Ohlin-Ramsey Model'. London, Centre for Economic Policy Research. https://cepr.org/active/publications/discussion_papers/dp.php?dpno=2535