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Why are Trade Agreements Regional?
(Vanderbilt University, 2010)
This paper shows how distance may be used to coordinate on a unique equilibrium in which trade agreements are regional. Trade agreement formation is modeled as coalition formation. In a standard trade model with no distance ...
Optimim Tariffs and Retaliation: How Country Numbers Matter
(Vanderbilt University, 2009)
This paper identifies a new terms-of-trade externality that is exercised through tariff setting. A North-South model of international trade is introduced in which the number of countries in each region can be varied. As ...