This paper posits a formal political economy model where the principle of reciprocity in multilateral trade talks results in the gradual elimination of tariffs. Reciprocity trade talks turn each nation’s exporters into anti-protectionists at home; they lower foreign tariffs by convincing their...

Deardorff (1994) provides a condition that is necessary for factor price equalization across countries. That condition is a generalization of "country endowments contained in the diversification cone" from the standard 2x2x2 Hecksher-Ohlin model to the case of many goods, countries and factors....

As the tenth anniversary of EMU is approaching, a debate is underway as to whether the single currency has promoted or hindered convergence among the countries of the Eurozone. On the one hand, there is wide agreement on the fact that asymmetric shocks have subsided after the creation of the...

We revisit Western Europe’s record with labor-productivity convergence, and tentatively extrapolate its implications for the future path of Eastern Europe. The poorer Western European countries caught up with the richer ones through both higher rates of physical capital accumulation and...

While recent research has explored the phenomenon of drug parallel trade in regulated environments such as the European Union (EU), or the European Economic Area, little is known about the mechanisms that explain its origin or the role of the distribution chain in exporting and importing...