Economic Integration In The Americas: 1975-1992

Abstract

Latin American countries renewed their interest in regional trading blocs during the 1980s. According to Salgado, this renewed interest took the form of two phases: 1984-87, and from 1986 on. This paper uses a gravity equation to examine Latin American and Caribbean trade flows to ascertain the effectiveness of the Central American Common Market, Andean Pack and Latin American Integration Association, and to identify the factors affecting Latin American integration. Geographic distances are adjusted for the level of infrastructure development in an attempt to better proxy economic distance. A Chow Test is used to test for Salgados two phases.