| Budget Amount *help |
¥2,100,000 (Direct Cost: ¥2,100,000)
Fiscal Year 2005: ¥700,000 (Direct Cost: ¥700,000)
Fiscal Year 2004: ¥800,000 (Direct Cost: ¥800,000)
Fiscal Year 2003: ¥600,000 (Direct Cost: ¥600,000)
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| Research Abstract |
Together with my coauthor, Hideo Konishi at Boston College, I have analyzed bilateral Free Trade Agreements (FTAs) in the framework of the network formation game. We have shown that countries that are similar in industrialization and economic size tend to sign an FTA, and hence the complete global FTA network is stable if all countries are symmetric in them. We have also found that if transfers between FTA signatories are possible, the complete global FTA network is stable even if countries are quite asymmetric. The degree of substitution between goods that countries produce and export to one another plays an important role as well. If the degree of substitution is low, the complete FTA network is a unique stable network. Whereas if it is high, there will be other stable FTA networks than the complete network. In such a case, the final FTA network depends on the path of FTA formation. These results of our analysis is reported in "Free Trade Networks," COE/RES Discussion Paper No. 27, Hitotsubashi University (under review by a journal), and "Free Trade Network with Transfers," Japanese Economic Review,56(2),144-164. In addition, we report in "A Decomposition in Quasi-Linear Economies," Economics Letters,85(1),29-34,2004 that if consumers' utilities are described by quasi-linear utility functions, social welfare can be represented by the sum of gross consumers' utility and industrial trade surplus.
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