British Imports of Manufactures and the Common Market

This paper assesses the impact of Britain's accession to the EEC on her imports of manufactures. It argues that account must be taken of the substitutability of imports for home production, and that price effects must be modelled consistently. It applies Deaton and Muellbauer's ¿Almost Ideal Demand System¿ to annual data on UK home sales and imports from ten sources. It identifies considerable trade creation, but little or no trade diversion.