We assume an imperfectly competitive world with <i>n</i> commodities and address the question of whether or not (regional) trade blocs are viable. To answer this fundamental question, we use a notion of stability, offered by <link rid="b5">Greenberg (1990)</link>, and show that regional trade blocs are not viable as they...

We show that wage behavior as well as the skilled-unskilled wage gap depend on elasticity of import demand. Although, our analysis is in the spirit of the Stolper-Samuelson theorem, factor intensity plays no role in our results.

Using a three-sector general equilibrium model with non-traded goods, we investigate the impact of foreign direct investment on the real wages of skilled and unskilled workers. We show that foreign direct investment increases the real wages of skilled and unskilled workers, but widens the gap...