Register  |  Login  |  Inquiries  |  Sitemap |  
Advanced Search
Journal of Economic Integration 2007 September;22(3) :664-683.
DOI: https://doi.org/10.11130/jei.2007.22.3.664
Economic Analysis of Free Trade Agreements: Spaghetti Bowl Effect and a Paradox of Hub and Spoke Network

Haruo Horaguchi  (Horaguchi H.)

Hosei Business School of Innovation Management
Copyright ©2007 Journal of Economic Integration
ABSTRACT

This paper shows a new exposition of the Trade Diversion Effect when Free Trade Agreements are created. Hub and spoke type of trade networks cause systemic overproduction, and member countries exit from the markets, whereas perfectly connected networks create sustainable markets in any number of markets. Since there are two basic patterns for creating FTAs, bilateral and multilateral, a network pattern is derived from these negotiation patterns. The hub country may be aggressive in pursuing Free Trade Agreements with various countries, but accumulation of bilateral negotiations may cause Trade Diversion Effect in the regional economies.

JEL classification: F13, F17, L13

Keywords: Free Trade Agreements | Network Theory | Graph Theory | Trade Diversion Effect | Spaghetti Bowl Effect
TOOLS
PDF Links  PDF Links
Full text via DOI  Full text via DOI
Download Citation  Download Citation
  Print
Share:      
METRICS
5
Crossref
0
Scopus
4,604
View
42
Download
Impacts of Free Trade Agreement on US State Vegetable and Fruit Trade Flows  2009 March;24(1)
Editorial Office
Center for Economic Integration, Sejong University, 209, Neungdong-Ro, Gwangjin-Gu,
Seoul, 05006, Korea
TEL : +82-2-3408-3338    FAX : +82-2-6935-2492   E-mail : jei@sejong.ac.kr
Browse Articles |  Current Issue |  For Authors and Reviewers |  About
Copyright© by Center for Economic Integration.      Developed in M2PI