The Welfare Implications of Trading Blocs among Countries with Different Endowments

Mar 1996
This paper presents a model in which trade is motivated both by preference for variety and comparative advantages. This framework is used to analyze the welfare implications of trading blocs among countries with different endowments with and without transportation costs. This paper was prepared for the NBER Conference on Regionalization of the World Economy, October 1995, Woodstock, Vermont.