A bstract-An eight-region numerical general equilibrium model of global trade is used to investigate the impacts of various geographically discriminatory trade policy arrangements (GDAs) on regional trade and welfare. Results suggest that the important factors determining gains and losses in any GDA are such issues as whether initial levels of protection are asymmetric, the relative sizes of participating regions, and the pattern of trade between participating and non-participating countries. Results also appear to confirm the implication of Wonnacott and Wonnacott (1981) that the gain from reducing a partner's tariff is typically a more important consideration in evaluating potential benefits from a customs union, than the traditional concerns of trade creation and trade diversion.

In this paper we explore the incidence of a sector-specific minimum wage in a two-sector Harris-Todaro model with intersectorally mobile capital. In addition to the output and substitution effects in Harberger's tax incidence analysis, an additional effect reflecting the endogenously generated unemployment arises in the Harris-Todaro case. We also explore the functional incidence issue numerically for Mexico by using general equilibrium computational techniques. In a number of the calculations reported, capital more than bears the income loss from unemployment caused by the sector-specific minimum wage.

John Whalley, Philip M. White, A Decomposition Algorithm for General Equilibrium Computation with Application to International Trade Models: A Correction, Econometrica, Vol. 53, No. 3 (May, 1985), p. 679