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Will a Regional Bloc Enlarge?

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Author Info
Giorgia Albertin

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Abstract

This paper investigates whether a regional bloc would enlarge or remain stagnant in size using a model where enlargement is the endogenous outcome of the interaction between the supply of and demand for membership. We show that a maximum size of the bloc exists beyond which the regional policy-maker will be unwilling to enlarge further, and that either the supply side or the demand side of membership might be binding in the determination of the equilibrium size of the bloc. Furthermore, we analyze how the deepening of integration within a regional bloc affects its width. We show that deeper integration may lead to wider integration when the demand side of membership is binding in the determination of the equilibrium size of the bloc, while the equilibrium size of the bloc will be unaffected when the supply side of membership is binding.

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Paper provided by International Monetary Fund in its series IMF Working Papers with number 07/69.

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Length: 33 pages
Date of creation: 29 Mar 2007
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Handle: RePEc:imf:imfwpa:07/69

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Related research
Keywords: Regional trading bloc ; enlargement ; supply of membership ; International trade agreements ; Membership ; Trade relations ;

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References listed on IDEAS
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    Other versions:
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