European economic integration drives a political economy of regionalism that defines the principal axis of political-economic division in the New Europe. The New Economy drives a radical shift in EU policy from cohesion or redistribution toward innovation promotion, affecting distributional...

This paper studies which social networks maximize trust and welfare when agreements are implicitly enforced. We study a repeated trust game in which trading opportunities arise exogenously and a social network determines the information each player has. We show that cohesive communities, modeled...