Klimenko, Mikhail; Ramey, Garey; Watson, Joel - In: Journal of International Economics 74 (2008) 2, pp. 475-499
This paper presents a theory of dynamic trade agreements in which external institutions, such as the WTO, play a central role in supporting credible enforcement. In our model, countries engage in ongoing negotiations, and, as a consequence, cooperative agreements become unsustainable in the...