| Author: | Yi, S. |
| Title: | Endogenous formation of customs unions under imperfect competition: open regionalism is good |
| Journal: | Journal of International Economics
1996 : AUG, VOL. 41:1/2, p. 153-178 |
| Index terms: | CUSTOMS UNIONS COMPETITION ECONOMICS |
| Language: | eng |
| Abstract: | Consider an environment in which ex-ante symmetric countries can form customs unions freely. What are the welfare effects on member and non-member countries of the formation of welfare-maximizing customs unions? What are the properties of stable customs-union structures? Can one design a rule of customs-union formation which supports global free trade as an equilibrium outcome? The author shows that the formation of customs unions improves the aggregate welfare of member countries but reduces the welfare of non-member countries. |
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