Recent events, historical evidence and geographical proximity suggest that the six EFTAns and twelve Central and East European countries (CEECs) are natural trading partners. This paper evaluates this suggestion by estimating the potential for EFTA-CEEC trade using the gravity model of Wang and...

Feedback mechanisms are the key to sequencing when it comes to regional integration. Feedback mechanisms can mean that today’s policy or institution alters the political economy landscape in a way that makes it politically optimal for future governments to take further steps towards...

A simple model of offshoring, which depicts offshoring as ‘shadow migration,’ permits straightforward derivation of necessary and sufficient conditions for the effects on wages, prices, production and trade. We show that offshoring requires modification of the four classic international...

Economic thinking on regionalism has traditionally focused on the Vinerian question: Would a nation gain from joining a trade bloc? Since 1991, "Big Think Regionalism" considers the broader question of regionalism’s impact on the world trading system focusing on two questions: Does spreading...

In this paper, we evaluate the impact of Turkey's membership on EU voting. The aspects that we discuss are decision-making efficiency and the distribution of power in the EU's leading decision making body the Council of Ministers. We compare two alternative Council voting rules: those accepted...

Trade is measured on a gross sales basis while GDP is measured on a net sales basis, i.e. value added. The rapid internationalisation of production in the last two decades has meant that gross trade flows are increasingly unrepresentative of value added flows. This fact has important...

The “distance effect” measuring the elasticity of trade flows to distance has been to be rising since the early 1970s in a host of studies based on the gravity model, leading observers to call it the “distance puzzle”. We review the evidence and explanations. Using an extensive data set...

All preferential trading agreements (PTAs) short of a customs union use Rules of Origin (RoO) to prevent trade deflection. RoO raise production costs and create administrative costs. This Paper argues that in the case of the recent wave of North-South PTAs, the presence of RoO virtually limits...

This paper addresses the final steps to global free trade – what they might look like, what sort of political economy forces might drive them, and what the WTO might do to guide them. Two facts form the point of departure: 1) Regionalism is here to stay; world trade is regulated by a motley...

Many studies have found a positive correlation between trade and growth, but do not attempt to identify the economic mechanisms involved. This paper attempts to identify one of the mechanisms linking trade and growth. In particular, we present a novel theoretical model that establishes a link...