Series: Working Papers. 2009.
Author: Ayman El Dahrawy Sánchez-Albornoz and Jacopo Timini.
Published in: The World Economy. Volume 44, Issue 7, Jul 2021, pp 2004-2040
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Abstract
This study analyses the process of economic integration in Latin America. Making use
of a structural gravity model, this paper provides an ex-post assessment of the effect of
the trade agreements (TAs) signed by Latin American countries on international trade.
We account for the last wave of TAs proliferation and estimate treaty level effects.
On average, TAs had a positive effect on Latin American trade. This holds true for both
intra-Latin American agreements and agreements between Latin American countries
and the rest of the world. However, we unveil that these average estimates cover
a substantial degree of heterogeneity across TAs. Additionally, we quantify ex-ante
general equilibrium effects on the trade volumes and welfare of Latin American
countries under different scenarios of deeper integration.