2006–2010

Trade Agreements as Endogenously Incomplete Contracts

Reprint No. 2010:13

Author(s): Henrik Horn, Giovanni Maggi and Robert W. StaigerYear: 2010 Title: American Economic Review Volume (No.): 100 (1) Pages: 394–419
Online article (restrictions may apply)


We propose a model of trade agreements in which contracting is costly, and as a consequence the optimal agreement may be incomplete. In spite 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. (JEL D86, F13)


Reference:
Horn, Henrik, Giovanni Maggi and Robert W. Staiger (2010), "Trade Agreements as Endogenously Incomplete Contracts". American Economic Review 100(1), 394–419.

Henrik Horn

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Ph: +46 8 665 4540
henrik.horn@ifn.se

An Agenda for Europe

Institutional Reform for Innovation and Entrepreneurship

Omslag 2017 Institutional Reform for Innovation and Entrepreneurship.jpg

The authors of this book, Niklas Elert, Magnus Henrekson and Mikael Stenkula, advise the economies of the European Union to become more entrepreneurial in promoting innovation and economic growth. The authors propose a reform strategy with respect to several aspects to achieve this goal.

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To present ongoing research informal brown-bag seminars are held on Mondays at 11:30 am. This is an opportunity for IFN researchers to test ideas and results.

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