DOES THE CENTRAL AMERICAN COMMON MARKE1 BENEFIT ITS MEMBERS?

Jose Mendez, DONALD J. ROUSSLANG

Research output: Contribution to journalArticle

Abstract

This paper estimates the welfare consequences for members of the Central American Common Market if they abolish their union by imposing tariffs against each other. An imperfect substitutes trade model is used and direct estimates are provided for the effects of the union. These are important advances over previous studies, which relied on perfect substitutes models and merely imputed the effects of the union by assuming that it left either market shares or income elasticities of demand constant in member countries. The union is shown to impose static welfare losses on the members, which contradicts the results of previous studies.

Original languageEnglish (US)
Pages (from-to)473-487
Number of pages15
JournalEconomic Inquiry
Volume27
Issue number3
DOIs
StatePublished - 1989
Externally publishedYes

ASJC Scopus subject areas

  • Business, Management and Accounting(all)
  • Economics and Econometrics

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