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Hub-and-Spoke Free Trade Areas

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dc.affiliation.dptoUC3M. Departamento de Economíaes
dc.contributor.authorDeltas, George
dc.contributor.authorDesmet, Klaus
dc.contributor.authorFacchini, Giovanni
dc.contributor.otherCEPR
dc.date.accessioned2012-05-25T08:49:07Z
dc.date.available2012-05-25T08:49:07Z
dc.date.issued2006-11
dc.descriptionThis paper is an output of the Research Training Network 'Trade, Industrialisation and Development' (Contract No. HPRN-CT-2002-00236) funded through the Improving Human Potential activity of the European Commission's Fifth Framework Programme
dc.description.abstractThis paper analyzes how the sequential formation of free trade areas affects the volume of trade between member countries. In a three--country, three--good model, if two countries have a free trade area, and both sign a similar agreement with the third, trade between the two decreases, and welfare rises in both. However, if only one of them signs an FTA with the third, a hub-and-spoke pattern arises. If the two spokes have a comparative advantage in different goods, trade between the two countries in the initial FTA increases, with welfare rising in the hub and falling in the spoke. We provide evidence consistent with the theoretical model when studying the experience of Israel.
dc.description.sponsorshipFinancial aid from the Spanish Ministerio de Educación y Ciencia (SEJ2005-05831) and the Fundación Ramón Areces is gratefully acknowledged
dc.format.mimetypetext/plain
dc.format.mimetypeapplication/pdf
dc.identifier.urihttps://hdl.handle.net/10016/4807
dc.language.isoeng
dc.relation.ispartofseriesDiscussion Paper
dc.relation.ispartofseries5960
dc.relation.publisherversionhttp://www.cepr.org/pubs/dps/DP5960.asp
dc.rights.accessRightsopen access
dc.subject.ecienciaEconomía
dc.subject.jelF11
dc.subject.jelF13
dc.subject.otherFree trade areas
dc.subject.otherHub-and-spoke
dc.subject.otherIsrael and trade volumes
dc.titleHub-and-Spoke Free Trade Areas
dc.typeworking paper*
dspace.entity.typePublication
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