The author's model demonstrates that when imports are predominantly intermediate inputs - as they are in most … developing countries - import restrictions can not always be relied upon to improve the trade balance. Such restrictions act as a … consequence of import restrictions is a large enough reduction in export supplies to swamp the direct effect of the restrictions …

authors survey the ambiguous economies of customs unions, emphasizing that the traditional dichotomy between"trade creation"and"trade … diversion"is not particularly helpful for policy. In a world with trade restrictions, regional integration presents certain …