Page 247 - DECO503_INTERNATIONAL_TRADE_AND_FINANCE_ENGLISH

Unit 21 : Static and Dynamic Effects of a Custom Union and Free Trade Organization

3. Trade expansion : When lower market prices in one partner country stimulates total domestic Notes
demand which is satisfied by increased foreign trade with another partner
country
21.6 Review Questions

1. What is meant by trade regimes?
2. Write a short note on the effects of Custom Union. Discuss.
3. Discuss the dynamic effects of custom union.
Answers: Self-Assessment
1. (i)(d) (ii)(a) (iii)(d) (iv)(b) (v)(a)

21.7 Further Readings

1. Berglas, Eitan (1981), "Harmonization of Commodity Taxes: Destination, Origin
and Restricted Origin Principles," Journal of Public Economics, 16, pp. 377-387.
2. Bhagwati, Jagdish and Anne Krueger (1973), Exchange Control, Liberalization
and Economic Development, American Economic Review, 63 (2), May, 419-427.
3. Bhagwati, Jagdish and Arvind Panagariya (1996), "Preferential Trading Areas
and Multilateralism: Strangers, Friends or Foes," in J. Bhagwati and A. Panagariya
(eds.), The Economics of Preferential Trade Agreements, Washington D.C.: AEI
Press.
4. Grossman, Gene and Elhanin Helpman (1995), The Politics of Free-Trade
Agreements, The American Economic Review, 85 (4), 667-690.

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