A Theory of Insidious Regionalism
解释世界贸易中区域主义兴起是一种协调失灵，源于生产中的行业特定沉没成本和贸易谈判摩擦，导致区域集团形成后产生帕累托低效均衡。
This paper presents an interpretation of rising regionalism in world trade as a coordination failure, based on (i) sector-specific sunk costs in production, and (ii) "friction" in trade negotiation. Given these elements, if a regional trade bloc is expected to form, private agents will make investments that will make bloc member countries more specialized toward each other, but bloc and nonbloc countries mutually less specialized. This diminishes the ex post demand for multilateral free trade. Thus, the expected supply of regionalism generates its own demand, creating a Pareto-inferior equilibrium.