We embed an incomplete contracts setting into a model of economic geography with heterogeneous firms whose process of production can be geographically separated. Because of the presence of international incomplete contracts, trade liberalization is not necessarily welfare-enhancing. We show that...

We embed an incomplete contracts setting into a model of economic geography with heterogeneous firms whose process of production can be geographically separated. Because of the presence of international incomplete contracts, trade liberalization is not necessarily welfare-enhancing. We show that...

Twenty-five papers survey and illustrate approaches to and applications of contract economics. Earlier versions of most of the papers were published in special issue no. 92 of the Revue d'Economie Industrielle entitled "The Economics of Contracts in Prospect and Retrospect" (2000). Papers...