In a small open economy model where imports (exports) are differentiated by region of origin (destination), the welfare effects of a preferential trade agreement (PTA) are considered. Trade creation is found to be a concave function of pre-union partner trade shares. This contrasts with earlier...

We develop a computable general equilibrium model of the Egyptian economy. The model is suitable for analyzing the impacts of reforms in the tax system, the trade-policy regime, or both taken together. A two-sector, general-equilibrium model is presented diagrammatically to illustrate the...

We consider analytically and numerically the welfare tradeoffs inherent in a preferential trade area (PTA) with products differentiated by region of origin. For a small open economy in such a setting, welfare gains are associated with higher trade volumes within the PTA. However, welfare losses...