Flexibility in Trade Bloc Design

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Flexibility in Trade Bloc Design

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dc.contributor.author Melatos, Mark
dc.contributor.author Dunn, Stephanie
dc.date.accessioned 2010-06-17
dc.date.accessioned 2010-06-17T08:54:01Z
dc.date.available 2010-06-17T08:54:01Z
dc.date.issued 2010-06-17
dc.identifier.uri http://hdl.handle.net/10398/8069
dc.description.abstract A key characteristic of any trade bloc is its “flexibility” – the extent to which it can be modified or augmented by existing members. This paper investigates how prospective trade bloc members value the flexibility of proposed trade agreements in a changing trading environment. We demonstrate that country characteristics as well as the nature of the trade shock influence a nation’s desire for trade bloc flexibility. Our model of endogenous coalition formation yields predictions that are consistent with three stylized facts which characterize regionalism: (i) overlapping trade agreements, (ii) the popularity of free trade areas relative to customs unions and (iii) renegotiation or disbandment of existing trade agreements is rare. Finally, for the first time in the literature, we provide clear predictions about the identity of “hub” and “spoke” trade bloc members when overlapping free trade areas arise in equilibrium. en_US
dc.format.extent 25 s. en_US
dc.language eng en_US
dc.publisher Department of Economics en_US
dc.relation.ispartofseries Working Paper;2
dc.subject.other Trade agreement flexibility en_US
dc.subject.other optimal trade bloc design en_US
dc.subject.other regional trade agreements en_US
dc.subject.other free trade areas en_US
dc.subject.other customs unions en_US
dc.title Flexibility in Trade Bloc Design en_US
dc.type wp en_US
dc.accessionstatus modt10jun17 en_US
dc.contributor.corporation Copenhagen Business School. CBS en_US
dc.contributor.department Økonomisk Institut en_US
dc.contributor.departmentshort ECON en_US
dc.contributor.departmentuk Department of Economics en_US
dc.contributor.departmentukshort ECON en_US
dc.idnumber x656600453 en_US
dc.publisher.city Frederiksberg en_US
dc.publisher.year 2010 en_US


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