Is Regionalism Simply a Diversion? Evidence from the Evolution of the EC and EFTA

November 1, 1995

Disclaimer: This Working Paper should not be reported as representing the views of the IMF.The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate

Summary

This paper considers the impact on trade of preferential arrangements in Europe since the 1950s. Using a first difference version of the gravity model, we find that the EEC and EFTA altered the pattern of international trade. We also find evidence of trade diversion in several cases, notably that of the EEC in the 1960s.

Subject: Customs unions, Econometric analysis, Foreign exchange, Gravity models, International trade, Plurilateral trade, Purchasing power parity, Trade agreements

Keywords: Asia and Pacific, constant term, Customs unions, EEC membership, EEC trade, EFTA country, Europe, free trade, Global, Gravity models, Plurilateral trade, Purchasing power parity, third-country effect, Trade agreements, trade creation, WP

Pages:
31
Volume:
1995
DOI:
https://doi.org/10.5089/9781451853155.001
Issue:
109
Series:
Working Paper No. 1995/109
Stock No:
WPIEA1091995
ISBN:
9781451853155
ISSN:
1018-5941

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Notes

Revised version of paper presented at the Sixth Annual East Asian Seminar on Economics, Seoul, Korea, June 15-17, 1995.

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