This paper proposes a decomposition of the likely effects of a “deep” regional integration arrangement for a small country. It is based on a steady-state general equilibrium model which allows to capture the long-term effects of a variety of factors, including the reduction of non-tariff...

The paper uses a two--sector efficiency--wage model to analyze the consequences of immigration for a small open economy with a dual labor market. Immigrants are characterized by an (exogenous) return probability. Legal regulations impose preferential hiring of natives or "old" immigrants. As a...