DP1316 Regionalism and the Rest of the World: The Irrelevance of the Kemp-Wan Theorem
|Author(s):||L. Alan Winters|
|Publication Date:||January 1996|
|Keyword(s):||Kemp-Wan Theorem, Regional Integration, Terms of Trade|
|Programme Areas:||International Trade and Regional Economics|
|Link to this Page:||cepr.org/active/publications/discussion_papers/dp.php?dpno=1316|
Many commentators purport to use the Kemp-Wan Theorem to discuss the effects of regional integration schemes on non-member countries, and to operationalize the theorem in terms of the share of member countries' imports from non-members. This paper shows that Kemp and Wan (1976) say nothing about changes in non-member welfare and that the latter is more closely related to non-members' imports than to their shares of members' markets. The paper suggests that a new approach to this issue is required.