Gradualism in Trade Agreements with Asymmetric Countries
用递归方法刻画了不对称规模国家间自我执行贸易协定的收益边界，发现当仅一国激励约束起作用时，有效协定从正贸易扭曲开始，最终达到自由贸易，并分析了国家规模、消费平滑和沉没投资的影响。
This paper uses recursive methods to characterize the payoff frontier of self-enforcing trade agreements between countries of asymmetric size. We show that at points on the frontier where only one country's incentive constraint binds, the efficient agreement will be a non-stationary one that starts with a positive trade distortion but eventually reaches free trade. Our analysis illustrates how (i) relative country size, (ii) consumption smoothing incentives, and (iii) sunk investments affect the form of efficient trade agreements. In contrast to previous work on gradualism, our results are obtained from a model in which the economic environment is stationary. Copyright 2002, Wiley-Blackwell.