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Title: |
MERCOSUR and the U.S.: An Intertemporal General Equilibrium Evaluation
of the Regional Integration |
| Author: |
Diao, Xinshen;
Somwaru, Agapi |
| Author
Affiliation: |
US Dept of
Agriculture |
| Source: |
International Economic Journal, Spring 1999, v. 13, no. 1, pp. 27-43 |
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Publication Date: |
Spring 1999 |
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Abstract: |
A dynamic general equilibrium model is
constructed to analyze the effects of the Southern Common Market (MERCOSUR)
on the member countries as well as on the U.S. economy. By taking into
account dynamic adjustments, we find that while the effects of MERCOSUR
on its member countries' investment, consumer welfare and national
product are positive, the respective effects on the U.S. economy are
negative. Such negative effects are small, as U.S.-MERCOSUR trade shares
with respect to U.S. total trade are quite small. When MERCOSUR
additionally adopts its common external tariff policy, growth in
MERCOSUR's total trade implies an increase in trade between MERCOSUR and
other countries. In this case, both MERCOSUR member countries and the
U.S. are better off. |
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