Regional effects of economic integration: the case of Brazil

In this paper, alternative strategies of economic integration are evaluated from the Brazilian perspective. Traditional trade gains and losses are considered in a cost-competitiveness approach, based on relative changes in the industrial cost and demand structures. In the first part of the analysis, a national CGE model is used in order to assess the ftrst-round impacts of three alternative trade liberalization scenarios. In the second part, a Machlup-Goodwin-type interregional model is integrated to the CGE model in order to generate a top-down disaggregation of the national results. Spatial implications of the trade policies are assessed, showing that the trade strategies examined are likely to increase regional inequality in the country. (C) 2002 Society for Policy Modeling. Published by Elsevier Science Inc. All rights reserved.