Trade Creation and Trade Diversion: A Case Study of MDCs in CARIFTA, 1968 - 1974

Trade Creation and Trade Diversion: A Case Study of MDCs in CARIFTA, 1968 - 1974

THIS PAPER INVESTIGATES THE EFFECTS OF TRADE CREATION AND TRADE DIVERSON AMONG THE FOUR MDCS OF CARIFTA DURING THE PERIOD 1968-74. IT ATTEMPTS TO SHED SOME LIGHT ON SOME POSSIBLE COSTS AND BENEFITS OF ECONOMIC INTEGRATION TO THE INDIVIDUAL COUNTRIES AS WELL AS TO THE AREA AS A WHOLE. USING BALASSA&#...

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Veröffentlicht in:Social and economic studies 1989-09, Vol.38 (3), p.149-175
Hauptverfasser: Gondwe, Derrick K, Griffith, Winston H
Format: Artikel
Sprache:eng
Schlagworte:
CARIBBEAN
INTEGRATION
INTERNATIONAL TRADE
THIRD WORLD NATIONS
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Zusammenfassung:THIS PAPER INVESTIGATES THE EFFECTS OF TRADE CREATION AND TRADE DIVERSON AMONG THE FOUR MDCS OF CARIFTA DURING THE PERIOD 1968-74. IT ATTEMPTS TO SHED SOME LIGHT ON SOME POSSIBLE COSTS AND BENEFITS OF ECONOMIC INTEGRATION TO THE INDIVIDUAL COUNTRIES AS WELL AS TO THE AREA AS A WHOLE. USING BALASSA'S METHOD, THE PAPER ESTIMATES INCOME ELASTICITIES OF IMPORT DEMAND, BEFORE AND AFTER INTEGRATION. THE RESULTS SHOW THAT TRADE CREATION FOR CARIFTA AS A WHOLE DID TAKE PLACE. HOWEVER, THE BENEFITS OF TRADE CREATION WERE UNEVENLY DISTRIBUTED. THE PAPER THEREFORE CONCLUDES THAT EFFECTIVE MECHANISMS MUST BE DEVELOPED TO MINIMIZE THE COSTS TO MEMBER COUNTRIES AND PREVENT ECONOMIC POLARIZATION.
ISSN:0037-7651