Integração, Crescimento E Bem-Estar

Abstract

We present a model of growth for the case of two economies with integrated markets and where transportation costs in the form of iceberg costs are imposed. These costs will have negative impact on growth rates after integration, but will play a key role, together with scale factors, on the location of the firms of the intermediate sector. It is shown, however, that the final effect of the integration of markets over growth rates is positive, because of the increase in the number of intermediate factors available and the increase in the size of markets. The welfare effect of integration is ambiguous. It will depend on discount rates and the level of per capita consumption right after integration, which is a function of the endowments of each country. A simulation of the model for the case of Argentina and Brazil ís also presented.