An Application of the Verhulst GM in Forecasting the Trade Create Effect of NAFTA

摘要

In this paper, the Verhulst GM is applied to forecast the trade creation effect of North America Free Trade Area (NAFTA) from the perspective of US, which experienced a relatively short-term recession from 2001 to 2003. The forecasting results reveal that the trend of US foreign trade continues showing its distinct trade creation effect which is distinguished from that of traditional Custom Union (CU) after the establishment of NAFTA in 1994 particularly due to its institution innovation.