Bilateral versus Multilateral Trade and Investment Liberalisation
To assess the welfare effects of bilateral versus multilateral trade and/or investment liberalisation in general equilibrium, we set up a three-country and three-factor knowledge-capital model of trade and multinational activity. Numerical simulation results indicate that multilateral liberalisation tends to dominate bilateral liberalisation in welfare terms. A transition economy tends to prefer bilateral over multilateral liberalisation to avoid plant relocation. For similar reasons, a developed country may prefer bilateral over multilateral liberalisation, if the other economies exhibit big relative factor endowment differences. Copyright 2007 The AuthorsJournal compilation 2007 Blackwell Publishing Ltd .
Year of publication: |
2007
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Authors: | Egger, Peter ; Larch, Mario ; Pfaffermayr, Michael |
Published in: |
The World Economy. - Wiley Blackwell. - Vol. 30.2007, 4, p. 567-596
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Publisher: |
Wiley Blackwell |
Saved in:
freely available
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