Capital Market and Economic Growth in Transition Countries: Evidence from South East Europe
Bibliographic record
Abstract
ABSTRACT The South American trade bloc, Mercosur, is made up of the four countries of Brazil, Argentina, Uruguay, and Paraguay, with associate members, Chile and Bolivia. Mercosur has recently experienced a number of setbacks that have called into question their stability and effectiveness as a preferential trade bloc. Brazil's dominant self-motivated leadership role and unilateral actions have weakened the unstable union. Argentina's severe recession and the devaluation of the Brazilian real have also contributed the downward spiral. The recent decision of Chile to forgo full membership in Mercosur due to the high common external tariffs for non-member countries, should serve as blatant warning that Mercosur needs to change its ways. Although the early 1990's proved to a successful period, the recent downward trends require immediate action if Mercosur is to continue to be the dominant trade area of South America. This paper discusses the need for Mercosur to define itself multilaterally, as well as its future ambitions as a full customs union. Examination of an alternative trade bloc, a free trade area, as a feasible option for increasing growth and stability in the member countries is also discussed. Three critical steps are outlined that Mercosur must take to overcome its current unrest and instability, so that it can continue as the dominant trading power in South America. LITERATURE REVIEW The four South American countries of Brazil, Argentina, Uruguay, and Paraguay formed the trade bloc Mercado Comun del Sur or Southern Common Market--commonly known as Mercosur-in March of 1991. The primary objective of Mercosur was to create an integrated regional market whose members were committed to liberalizing trade with one another while imposing a common external tariff (CET) on goods and services imported from non-members (Connelly, 1999). In 1996, Mercosur extended its boundaries to include Chile and Bolivia as associate members. This type of regional trade bloc is known as a customs union (CU). The other type of regional trade bloc is known as a free trade area (FTA). In an FTA arrangement, there is free trade among country members, but each member sets its own tariffs with the rest of the world (Bandyopadhyay & Wall, 1999). Typically, FTAs are wide in scope and set up parameters for activity in fields as diverse as the free flow of capital goods, monetary policy, treatment of intellectual property, dispute resolution, anti-dumping, and rules of competition (Stinson, 1999). The North American Free Trade Agreement (NAFTA) between Mexico, the United States, and Canada is one of the largest and most sweeping economic agreements of this type. Customs Union (CU) The two most important characteristics of a customs union are the total or partial elimination of monetary and non-monetary trade barriers within the borders of the union, and the adoption of common tariffs and trade policies on products originating outside of the union (Nakos, 2001). The membership of a nation within the customs union could influence the trade of that nation in a variety of ways. Depending on the state of the international economy, the country could increase their trade with member countries because of the lower tariffs and yet receive higher costing lower quality products. A country could also be forced to reduce trade with a non-member partner due to the high tariffs mandated by the union while creating shortages of essential products that member countries do not have available for trade. On the other hand, the customs union could be a favorable move by neighboring countries to increase trade between them without jeopardizing trade with non-members. Under either scenario, the customs union theory differentiates between two sources of increased trade: trade creation and trade diversion. Trade creation can occur when there is a restructuring of the production facilities with the member countries of the customs union such that a more efficient mode of operation is achieved (Nakos, 2001). …
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How this classification was reachedexpand
Full frame distilled prediction
Teacher imitationNot calibrated prevalence, not ground truth. Human validation pending. Learned from the 10,348 direct Codex labels and 10,348 direct Gemma labels. Candidate is the union of thresholded teacher heads; consensus is their intersection. These outputs are machine_predicted_unvalidated and are not human labels or direct frontier model labels.
Codex and Gemma teacher scores by category
| Category | Codex | Gemma |
|---|---|---|
| Metaresearch | 0.003 | 0.002 |
| Meta-epidemiology (narrow) | 0.000 | 0.000 |
| Meta-epidemiology (broad) | 0.000 | 0.000 |
| Bibliometrics | 0.000 | 0.000 |
| Science and technology studies | 0.000 | 0.000 |
| Scholarly communication | 0.001 | 0.001 |
| Open science | 0.000 | 0.000 |
| Research integrity | 0.000 | 0.000 |
| Insufficient payload (model declined to judge) | 0.000 | 0.000 |
Machine scores (provisional)
The two teacher heads of the student model, read on this work. A score orders the frame for review; it never asserts a category, and the validation status ships verbatim with every row.
Baseline scores from an immature model (maturity gate not passed, 7 training rounds). Scores rank; they never assert a category.
score_only:v0-immature-baseline · verbatim from the scoring run: score_only means the number may rank works, and no category label ships from itClassification
machine, unvalidatedMachine predicted; a candidate call from one teacher head, not a consensus.
How this classification was reached, model by model and score by score, is at the end of the page under "How this classification was reached".