Two alternative estimates of the effects of EEC and EFTA on the pattern of trade

Abstract

This contribution pursues two of the approaches reviewed in the survey article in this issue, viz, the weighted-share approach and the analytical one. The results of the former are complemented by estimates of the corresponding effects on the level of trade. The analytical estimates are preceded by a discussion of the pure-demand approach developed by Armington and an attempt is made to incorporate in this approach a separate price-elasticity of import demand. The final section compares the numerical results of the two approaches. Rough estimates are made of the trade creating and trade diverting effects.