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Winners and losers from the gradual formation of trading blocs

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  • Inés Macho-Stadler
  • Licun Xue

Abstract

Although global free trade is efficient, each country's benefit from free trade depends on the path that leads to the global free trade agreement. Using a dynamic model of trading bloc formation, we how that when global free trade is reached gradually, the countries that are initially excluded gain less than the rest and may be even made worse-off by the final free trade agreement, compared with the initial state of no trading blocs.

Suggested Citation

  • Inés Macho-Stadler & Licun Xue, 2006. "Winners and losers from the gradual formation of trading blocs," Working Papers 274, Barcelona School of Economics.
    • Handle: RePEc:bge:wpaper:274
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    References listed on IDEAS

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    Cited by:

    1. Zhang, Jin & Cui, Zhiwei & Zu, Lei, 2014. "The evolution of free trade networks," Journal of Economic Dynamics and Control, Elsevier, vol. 38(C), pages 72-86.
    2. Seidmann, Daniel J., 2009. "Preferential trading arrangements as strategic positioning," Journal of International Economics, Elsevier, vol. 79(1), pages 143-159, September.
    3. Jue Wang & Shi Wang & Hua Wang & Yan Song, 2022. "A Numerical Simulation Analysis Framework of Sustainable Regional Economic Cooperation: A Case Study of the New Silk Road Economic Belt," Sustainability, MDPI, vol. 14(10), pages 1-18, May.
    4. Alejandro Caparrós & Jean-Christophe Péreau, 2017. "Multilateral versus sequential negotiations over climate change," Oxford Economic Papers, Oxford University Press, vol. 69(2), pages 365-387.
    5. Noritsugu Nakanishi, 2011. "Farsightedly Stable FTA Structures," Discussion Papers 1114, Graduate School of Economics, Kobe University.
    6. Fumi Kiyotaki & Toshiji Miyakawa, 2013. "Barriers to Global Free Trade through Bilateral Agreements," Review of International Economics, Wiley Blackwell, vol. 21(3), pages 536-548, August.
    7. Vesa Kanniainen & Staffan Ringbom, 2015. "The Value of NATO Option for a New Member," CESifo Working Paper Series 5399, CESifo.

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    More about this item

    JEL classification:

    • C71 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Cooperative Games
    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations

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