Will a Regional Bloc Enlarge?

March 1, 2007

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Format: Chicago

Giorgia Albertin. Will a Regional Bloc Enlarge?, (USA: International Monetary Fund, 2007) accessed December 3, 2024

Disclaimer: This Working Paper should not be reported as representing the views of the IMF.The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate

Summary

This paper investigates whether a regional bloc would enlarge or remain stagnant in size using a model where enlargement is the endogenous outcome of the interaction between the supply of and demand for membership. We show that a maximum size of the bloc exists beyond which the regional policy-maker will be unwilling to enlarge further, and that either the supply side or the demand side of membership might be binding in the determination of the equilibrium size of the bloc. Furthermore, we analyze how the deepening of integration within a regional bloc affects its width. We show that deeper integration may lead to wider integration when the demand side of membership is binding in the determination of the equilibrium size of the bloc, while the equilibrium size of the bloc will be unaffected when the supply side of membership is binding.

Subject: Agricultural commodities, Manufacturing, Regional trade, Trade agreements, Trade policy

Keywords: Trading bloc, WP

Publication Details

Pages:

33
Volume:

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DOI:

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Issue:

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Series:

Working Paper No. 2007/069
Stock No:

WPIEA2007069
ISBN:

9781451866339
ISSN:

1018-5941

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