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Does the Central American Common Market Benefit Its Members?

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  • Mendez, Jose A
  • Rousslang, Donald J

Abstract

This paper estimates the welfare consequences for members of the Central American Common Market if they abolish their union by imposing tariffs against each other. An imperfect substitutes trade model is used and direct estimates are provided for the effects of the union. These are important advances over previous studies, which relied on perfect substitutes models and merely imputed the effects of the union by assuming that it left either market shares or income elasticities of demand constant in member countries. The union is shown to impose static welfare losses on the members, which contradicts the results of previous studies. Copyright 1989 by Oxford University Press.

Suggested Citation

  • Mendez, Jose A & Rousslang, Donald J, 1989. "Does the Central American Common Market Benefit Its Members?," Economic Inquiry, Western Economic Association International, vol. 27(3), pages 473-487, July.
    • Handle: RePEc:oup:ecinqu:v:27:y:1989:i:3:p:473-87
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    Cited by:

    1. Taylor, Timothy G. & Melendez, Martha & Fairchild, Gary F., 1995. "Preferential Trading Arrangements In The Western Hemisphere," Journal of Food Distribution Research, Food Distribution Research Society, vol. 26(2), pages 1-11, September.

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