The regionalization of the world economy
By: edited by Jeffrey A. Frankel.
Contributors: Frankel, Jeffrey A.
Series: National Bureau of Economic Research project report
Publisher: University of Chicago Press
Published: 1998
Place of publication: Chicago
Language: eng
Number of pages: 285
Subjects: Trade blocs.; Regionalism.; International trade.; International economic integration.
Description: Regional economic arrangements such as free trade areas (FTAs), customs unions, and currency blocs have become increasingly prevalent in the world economy. Regionalization is both pervasive and controversial. Some economists are optimistic about the opportunities it creates; others are fearful that it may corrupt fragile efforts to encourage global free trade.

This volume, which includes both empirical and theoretical studies, addresses several important questions: Why do countries adopt FTAs and other regional trading arrangements? To what extent have existing regional arrangements actually affected patterns of trade? What are the welfare effects of such arrangements? Several chapters explore the economic effects of regional arrangements on patterns of trade, either on price differentials or via the gravity model on bilateral trade flows.

In addition, this book examines the theoretical foundation of the gravity model. The gravity model is supported as a useful method for empirical analysis, first by Deardorff's masterly demonstration of its theoretical underpinnings in virtually all trade models, then by flexible and subtle applications with adequate robustness checks. The papers collectively provide the first concentrated generalization and data-centered execution of Krugman's influential early-1990s bilateralism model.
Notes: Includes bibliographical references and indexes.