A Theory Of Insidious Regionalism

This file is part of IDEAS, which uses RePEc data

A Theory Of Insidious Regionalism

Author Info

John McLaren

Abstract

This paper presents an interpretation of rising regionalism in world trade as a coordination failure, based on (i) sector-specific sunk costs in production, and (ii) "friction" in trade negotiation. Given these elements, if a regional trade bloc is expected to form, private agents will make investments that will make bloc member countries more specialized toward each other, but bloc and nonbloc countries mutually less specialized. This diminishes the ex post demand for multilateral free trade. Thus, the expected supply of regionalism generates its own demand, creating a Pareto-inferior equilibrium. © 2001 the President and Fellows of Harvard College and the Massachusetts Institute of Technology

Download Info
To download:

If you experience problems downloading a file, check if you have the proper application to view it first. Information about this may be contained in the File-Format links below. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.

As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.

Publisher Info
Article provided by MIT Press in its journal The Quarterly Journal of Economics.

Volume (Year): 117 (2002)
Issue (Month): 2 (May)
Pages: 571-608
Download reference. The following formats are available: HTML (with abstract), plain text (with abstract), BibTeX, RIS (EndNote, RefMan, ProCite), ReDIF
Handle: RePEc:tpr:qjecon:v:117:y:2002:i:2:p:571-608

Contact details of provider:
Web page: http://mitpress.mit.edu/journals/

Order Information:
Web: http://mitpress.mit.edu/journal-home.tcl?issn=00335533

For technical questions regarding this item, or to correct its listing, contact: (Christopher F. Baum).

Related research
Keywords:

Other versions of this item:

Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

Carsten Herrmann-Pillath, 2006. "The true story of wine and cloth, or: building blocks of an evolutionary political economy of international trade," Journal of Evolutionary Economics, Springer, vol. 16(4), pages 383-417, October. [Downloadable!] (restricted)
Hyejoon Im, 2004. "Trading Blocs and Foreign Direct Investment: Endogenous Coalition Structure," Econometric Society 2004 Far Eastern Meetings 532, Econometric Society. [Downloadable!]
Willmann, Gerald & Blanchard, Emily, 2007. "Political Stasis or Protectionist Rut? Policy Mechanisms for Trade Reform in a Democracy," Economics Working Papers 2007,21, Christian-Albrechts-University of Kiel, Department of Economics. [Downloadable!]
Other versions:
- Emily Blanchard & Gerald Willmann, 2007. "Political Stasis or Protectionist Rut? Policy Mechanisms for Trade Reform in a Democracy," CESifo Working Paper Series CESifo Working Paper No. , CESifo Group Munich. [Downloadable!]
Richard Baldwin, 2007. "Multilateralising Regionalism: Sphagetti Bowls as building Blocs on the Path to Global Free Trade," Working Papers id:1231, esocialsciences.com. [Downloadable!]
Other versions:
- Baldwin, Richard, 2006. "Multilateralising Regionalism: Spaghetti Bowls as Building Blocs on the Path to Global Free Trade," CEPR Discussion Papers 5775, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)
- Richard Baldwin, 2006. "Multilateralising Regionalism: Spaghetti Bowls as Building Blocs on the Path to Global Free Trade," NBER Working Papers 12545, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
- Richard E. Baldwin, 2006. "Multilateralising Regionalism: Spaghetti Bowls as Building Blocs on the Path to Global Free Trade," The World Economy, Blackwell Publishing, vol. 29(11), pages 1451-1518, November. [Downloadable!] (restricted)
Chad Bown & Meredith Crowley, 2003. "Trade deflection and trade depression," Working Paper Series WP-03-26, Federal Reserve Bank of Chicago. [Downloadable!]
Other versions:
- Bown, Chad P. & Crowley, Meredith A., 2007. "Trade deflection and trade depression," Journal of International Economics, Elsevier, vol. 72(1), pages 176-201, May. [Downloadable!] (restricted)
Baldwin, Richard, 2008. "Big-Think Regionalism: a Critical Survey," CEPR Discussion Papers 6874, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)
Other versions:
- Richard Baldwin, 2008. "Big-Think Regionalism: A Critical Survey," NBER Working Papers 14056, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
Meredith A. Crowley, 2003. "An introduction to the WTO and GATT," Economic Perspectives, Federal Reserve Bank of Chicago, issue Q IV, pages 42-57. [Downloadable!]
Eric Bond, 2009. "Paths of efficient self-enforcing trade agreements," Economic Theory, Springer, vol. 41(1), pages 85-104, October. [Downloadable!] (restricted)
Baldwin, Richard & Rieder, Roland, 2007. "A Test of Endogenous Trade Bloc Formation Theory on EU Data," CEPR Discussion Papers 6389, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)
Itai Agur, 2007. "The US Trade Deficit, the Decline of the WTO and the Rise of Regionalism," Economics Working Papers ECO2007/17, European University Institute. [Downloadable!]
Other versions:
- Itai Agur, 2008. "The US Trade Deficit, the Decline of the WTO and the Rise of Regionalism," Global Economy Journal, Berkeley Electronic Press, vol. 8(3). [Downloadable!]

Statistics

Access and download statistics

Did you know? The most prolific authors have over 700 items listed on IDEAS.

This page was last updated on 2009-11-16.

This information is provided to you by IDEAS at the Department of Economics, College of Liberal Arts and Sciences, University of Connecticut using RePEc data on a server sponsored by the Society for Economic Dynamics.