This paper suggests that the institutional basis necessary to support efficient intemational trade is provided not only by treaties among national governments but also by international coalitions of private agents. International commercial arbitration is an important example of these private coalitions. The paper reviews the provisions and the practice of international arbitration, and presents...

I study the conversion of 13,000 miles of railroad track in the U.S. South to standard gauge on May 31 and June 1, 1886 as a large-scale natural experiment in compatibility. Using route-level freight traffic data, I find a large redistribution of traffic from steamships to railroads that declines with distance, with no effect on prices or aggregate shipments due to carriers’ anticompetitive con...

The enlargement of the European Union will bring many political, economical and structural changes on the Continent, which require careful and deep analysis to be made. This paper will grasp the enlargement of the European Union from the aspect of the trade pattern and trade specialization of six major European Union candidates; namely, Turkey, Bulgaria, Hungary, Romania, Poland and the Czech R...

EU enlargement is supposed to entail profound impact on the location of economic activities in Europe. Although there is concern about the implications of enlargement for regional disparities in the EU, corresponding empirical results are still rare. The objective of this analysis is to provide empirical evidence on enlargement effects with a special focus on border regions in the EU27 since th...

A simple two-country model of economic geography is constructed in order to examine the effect of tariff competition on the spatial distribution of manufacturing activities as well as on welfare. We show that when the transport cost is sufficiently small, tariff competition with firm migration leads to a core-periphery economy, where one of the two countries imposes no tariff in Nash equilibriu...

Fiscal Union Consensus Design under the Risk of Autarky* Inspired by the current debate over the future of the monetary union in Europe, this paper provides a simple model for the determination of the conditions of survival of the common good, which requires the creation of an effective fiscal union. We highlight the importance of institutional design and varying decision weights for the enlarg...

The paper examines the interrelationship between fiscal and monetary policy in a two-country monetary union. The worst scenario occurs when an independent central bank (CB) sets the nominal interest rate and responds to rising government debt/GDP ratios by monetisation. The result is high inflation, high debt/GDP ratios and a large public sector. Government debt and inflation are contained if t...

We examine the price dynamics in Indian cities using cointegration analysis. We identify and then calculate a common trend for prices in these 25 cities. We obtain the impulse response functions to calculate the rates of convergence to the prices, and find that the half-life of any shock is very small for Indian cities. Although a close to three-month half-life seems too fast, there are some in...

To explain the links between population distribution and economic integration, we construct a spatial economics model with endogenous fertility. A higher population concentration increases real wages and child-raising costs, thus lowering the fertility rate. However, people migrate to more populated regions to obtain higher real wages. We show that mobility across regions results in more people...

Yes. A country’s suitability for EMU entry depends on the intensity of trade with EMU members, and the extent to which its business cycles are correlated with those of other members. But both international trade patterns and international business cycle correlations are endogenous. Theoretically, economic integration has an ambiguous effect on the degree to which business cycles are correlated ...