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Formation endogène d'un bloc commercial dans une économie globale nord‐sud .
Author(s) -
Das Satya P.,
Ghosh Subhadip
Publication year - 2006
Publication title -
canadian journal of economics/revue canadienne d'économique
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.773
H-Index - 69
eISSN - 1540-5982
pISSN - 0008-4085
DOI - 10.1111/j.1540-5982.2006.00371.x
Subject(s) - economics , international economics , nash equilibrium , developing country , phenomenon , world economy , international trade , developed country , free trade , economy , microeconomics , economic growth , political science , physics , quantum mechanics , population , demography , sociology , law
The majority of the trading blocs to date are between similar countries, rather than between developed and developing countries. This paper provides a rationale for why trading blocs among similar countries may arise as an equilibrium phenomenon. It develops a model of an asymmetric world economy in which there are at least four countries. The countries are differentiated with respect to their market size and they choose their trading partners. In the coalition‐proof Nash equilibrium, either there is global free trade or free trade areas are formed among similar countries.