Discussion paper

DP1316 Regionalism and the Rest of the World: The Irrelevance of the Kemp-Wan Theorem

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.

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Citation

Winters, L (1996), ‘DP1316 Regionalism and the Rest of the World: The Irrelevance of the Kemp-Wan Theorem‘, CEPR Discussion Paper No. 1316. CEPR Press, Paris & London. https://cepr.org/publications/dp1316