This paper analyzes the impact of regional integration on outside countries as well as member countries, using a simple model with product differentiation and increasing returns to scale. Major findings include: (I) economic integration surely benefits the member contries but definitely worsens...

This paper analyses the impact of various configurations of regional economic integration on member countries as well as on outside countries under realistic assumptions. That is, we consider constant external tariffs as required by Article XXIV of the GATT and the asymmetric formation of the...