A Numerical General Equilibrium Model with Endogenous Formation of Trading Blocs

Timothy Fisher and Robert Waschik

Journal of Economic Integration, 2006, vol. 21, 881-914

Abstract:

We are interested in whether Preferential Trade Agreements facilitate attainment of Global Free Trade. Using a numerical general equilibrium model based on global trade data aggregated to 5 regions and 12 goods, we calculate the optimal tariffs in a Nash tariff-setting game when regions are free to form trading blocs. Using Riezman’s (1999) notion of blocking coalitions, we determine endogenously whichtradingbloc structures emerge when regions can form Free Trade Areas or Customs Unions. We nd that Global Free Trade may not be an equilibrium outcome unless constraints are placed on the way Customs Unions set their Common External Tariffs.

Keywords: Endogenous coalition formation; Preferential trade agreements (search for similar items in EconPapers)
JEL-codes: C68 F13 F15 (search for similar items in EconPapers)
Date: 2006
References: Add references at CitEc
Citations: View citations in EconPapers (2)

There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:ris:integr:0382

Access Statistics for this article

Journal of Economic Integration is currently edited by Seongeun Kim

More articles in Journal of Economic Integration from Center for Economic Integration, Sejong University Contact information at EDIRC.
Bibliographic data for series maintained by Yunhoe Kim ().