Economic Impact of Regional Trade Agreements and Economic Cooperation: Econometric Evidence

The paper focuses on regional trade agreements and economic cooperation and develops a new appropriate approach to study their impact on growth and trade. The approach is based on an endogenous tradegrowth theory and novelly specified in an economic integration (expenditure) framework which is the conceptual foundation of regional trade agreements. Importantly, it also appropriately takes into account major add and subfactors as recommended by Johansen, the computable general equilibrium pioneer, in practical economic planning and policy modelling. Applications of the approach to China, a key member of the Regional Comprehensive Economic Partnership agreement group, are also reported to provide useful insights for suitable evidencebased impact analysis. The analysis has relevance to such trading blocs as BRICS and the 21member Indian Ocean Rim Association where Iran is a key member. Policy implications from the findings are then briefly discussed.