In this study, the progress of " The Customs Union (CU) Theory" is discussed beginning from Jacob Viner. The paper starts by presenting Viner's original custom union analysis. Then the contributions to CU theory are divided into two main parts. Firstly, contributions made in the framework of parial equilibrium analysis which focused on the impact of CU formation on production and comsumption are examined (Meade, 1955; Johnson, 1962; Corden, 1965; Cooper and Massel, 1965). Secondly, general equilibrium models developed espicially by Lipsey (1960), Vanek (1965), Kemp (1969), Melvin and Bhagwati (1971) are analysed. All these studies have tried to eliminate Viner's simplifying assumptions and limited conclusions and to extent this theory.
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