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Bilateralism and Multilateralism: a Network Approach

  • PAPACCIO, Anna

    ()

    (CELPE - Centre of Labour Economics and Economic Policy, University of Salerno - Italy)

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    The deadlock in the Doha Round and the proliferation of regional and bilateral trade agreements has given rise to a new interest in the potential relationship between regionalism and multilateralism. This paper has two main aims. First, the formation of free trade agreements amongst symmetric and asymmetric countries has been studied by means of the network formation theory. Second, we have focused on the connection between bilateralism and multilateralism and we have evaluated the efficiency of the equilibrium configurations. In order to characterize and distinguish between bilateral and multilateral outcomes we have used two different network stability notions, that is, pairwise stability and strong stability. Moreover, from the analysis of pairwise and strong stability we have also obtained insights on the relationship between bilateralism and multilateralism.

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    Paper provided by CELPE - Centre of Labour Economics and Economic Policy, University of Salerno, Italy in its series CELPE Discussion Papers with number 125.

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    Length: 62 pages
    Date of creation: 31 Jan 2013
    Date of revision:
    Handle: RePEc:sal:celpdp:0125
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    1. Scott L. Baier & Jeffrey H. Bergstrand, 2005. "Do free trade agreements actually increase members’ international trade?," FRB Atlanta Working Paper No. 2005-03, Federal Reserve Bank of Atlanta.
    2. Jaime Behar, 1991. "Economic Integration and Intra-Industry Trade: The Case of the Argentine-Brazilian Free Trade Agreement," Journal of Common Market Studies, Wiley Blackwell, vol. 29(5), pages 527-552, 09.
    3. Taiji Furusawa & Hideo Konishi, 2002. "Free Trade Networks," Boston College Working Papers in Economics 548, Boston College Department of Economics, revised 08 Sep 2003.
    4. Jackson, Matthew O. & Wolinsky, Asher, 1996. "A Strategic Model of Social and Economic Networks," Journal of Economic Theory, Elsevier, vol. 71(1), pages 44-74, October.
    5. Levy, Philip I, 1997. "A Political-Economic Analysis of Free-Trade Agreements," American Economic Review, American Economic Association, vol. 87(4), pages 506-19, September.
    6. Taiji Furusawa & Hideo Konishi, 2004. "Free Trade Networks with Transfers," Boston College Working Papers in Economics 606, Boston College Department of Economics, revised 19 Jan 2005.
    7. Raihan, Selim, 2004. "Trade Barriers in a Global Perspective," Centre on Regulation and Competition (CRC) Working papers 30618, University of Manchester, Institute for Development Policy and Management (IDPM).
    8. Venkatesh Bala & Sanjeev Goyal, 2000. "A Noncooperative Model of Network Formation," Econometrica, Econometric Society, vol. 68(5), pages 1181-1230, September.
    9. Dutta, Bhaskar & Mutuswami, Suresh, 1997. "Stable Networks," Journal of Economic Theory, Elsevier, vol. 76(2), pages 322-344, October.
      • Dutta, Bhaskar & Mutuswami, Suresh, 1996. "Stable Networks," Working Papers 971, California Institute of Technology, Division of the Humanities and Social Sciences.
    10. Sanjeev Goyal, 2007. "Introduction to Connections: An Introduction to the Economics of Networks
      [Connections: An Introduction to the Economics of Networks]
      ," Introductory Chapters, Princeton University Press.
    11. Giorgio Fagiolo & Javier Reyes & Stefano Schiavo, 2007. "The Evolution of the World Trade Web," LEM Papers Series 2007/17, Laboratory of Economics and Management (LEM), Sant'Anna School of Advanced Studies, Pisa, Italy.
    12. James Gaisford & Olena Ivus, 2014. "Should Smaller Countries Be More Protectionist? The Diversification Motive for Tariffs," Review of International Economics, Wiley Blackwell, vol. 22(4), pages 845-862, 09.
    13. Juliette Milgram-Baleix & Ana Isabel Moro-Egido, 2005. "Intra-industry trade with emergent countries: what can we learn from spanish data?," Economics Bulletin, AccessEcon, vol. 6(12), pages 1-17.
    14. Sergio Currarini & Massimo Morelli, 2000. "original papers : Network formation with sequential demands," Review of Economic Design, Springer, vol. 5(3), pages 229-249.
    15. Ronald J. Wonnacott, 1996. "Trade and Investment in a Hub-and-Spoke System Versus a Free Trade Area," The World Economy, Wiley Blackwell, vol. 19(3), pages 237-252, 05.
    16. Goyal, S. & Joshi, S., 1999. "Bilateralism and free trade," Econometric Institute Research Papers EI 9953-/A, Erasmus University Rotterdam, Erasmus School of Economics (ESE), Econometric Institute.
    17. Watts, Alison, 2001. "A Dynamic Model of Network Formation," Games and Economic Behavior, Elsevier, vol. 34(2), pages 331-341, February.
    18. repec:ebl:ecbull:v:6:y:2005:i:12:p:1-17 is not listed on IDEAS
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