Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/81185 
Year of Publication: 
2006
Series/Report no.: 
IFN Working Paper No. 689
Publisher: 
Research Institute of Industrial Economics (IFN), Stockholm
Abstract: 
We propose a model of trade agreements in which contracting is costly, and as a consequence the optimal agreement may be incomplete. Inspite of its simplicity, the model yields rich predictions on the structure of the optimal trade agreement and how this depends on the fundamentals of the contracting environment. We argue that taking contracting costs explicitly into account can help explain a number of key features of real trade agreements.
Subjects: 
Trade Agreement
WTO
GATT
Endogenously Incomplete Contracts
JEL: 
D86
F13
K33
Document Type: 
Working Paper

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