"Based on static analysis, a number of studies argue that forming a regional trade agreement is more likely to raise welfare if member countries are "natural trading partners," while other studies claim that the opposite is true. Schiff and Wang look at the argument from a dynamic viewpoint by...

Based on static analysis, a number of studies argue that forming a RTA is more likely to raise welfare if member countries are natural trading partners,ʺ while other studies claim the opposite. This paper considers the argument from a dynamic viewpoint by examining the impact of trade with...