Size of Regional Trade Agreements and Regional Trade Bias

We test the relationship between size of regional trade agreement (RTA) and regional trade bias using a gravity equation on a large sample of 143 countries for the period 1980-2003. We find that regional trade bias declines with the size of the club and that three of the four expanding RTAs have already surpassed their ‘optimal’ sizes. There is no evidence that RTAs have set protection levels against outsiders noncooperatively.RTA, regional trade bias, trade flows

Expanding RTAs, Trade Flows, and the Multinational Enterprise

We test the relationship between the size of regional trade agreements (RTA) and openness by using a gravity equation with multilateral trade factors. Our sample includes eleven RTAs, seven with constant membership and four with expanding membership. Regional trade bias declines with the size of the club; three of the four expanding RTAs have already surpassed their ‘optimal’ size. We also explore the link between openness of the RTA and the geographic strategy of the multinational enterprise. We find strong evidence in favor of the regionalization strategy, which has been enhanced by the presence of RTAs.Trade Blocks, Regional Integration, Multinational Enterprises (MNEs), Plurilateral RTAs, Trade Creation, Trade Diversion

On the Relationship Between RTA Expansion and Openness

We test the relationship between the size of regional trade agreements (RTA) and openness using a gravity equation with multilateral trade factors on a large sample of 143 countries over period 1980-2003. Our sample includes eleven RTAs, seven with constant membership and four with an expanding membership. In the first group, there are more stumbling blocs than building blocs to freer global trade. In the second group, the opposite holds. We also find that regional trade bias declines with the size of the club and that three of the four expanding RTAs have already surpassed their ‘optimal’ size.gravity equation, plurilateral RTAs, size, trade creation, trade diversion

The Rising Power of the ECB: The Case of the Single Supervisory Mechanism

Introduction: The euro area was routinely criticized for its handling of the sovereign debt crisis, charged with doing ‘too little, too late’ in order to alleviate market pressure. Its inaction / delayed reaction may have worsened the impact of the crisis. Within the context the European Central Bank emerged as an indispensable institution in euro area governance. ECB President Mario Draghi is even credited with saving the euro thanks to his speech in July 2012 in which he vowed to do “whatever it takes.” This article considers the evolving role of the ECB in euro area governance, specifically financial supervision. Whereas at the start of the crisis, the ECB’s increasingly important role in crisis management was termed as largely incremental (cf Salines et al. 2012; Schwarzer 2012), the ECB has increased its capacity and its competences significantly since onset of the global financial crisis. From a technical standpoint, this decision could be viewed as a natural outgrowth of central bank responsibilities (over half of the euro area national central banks were already responsible for financial supervision in their respective countries). From a political perspective, however, this change had important consequences regarding the centralization of authority in an already-powerful institution. Moreover it concerns the supervision of a major industry in Europe that has long enjoyed national regulatory forbearance and close relationships with national governments. Finally, the designation of the ECB as SSM is inextricably connected with the decision to forge ahead with Banking Union, the most important change in EU governance since the introduction of the euro

Can Brexit Lead to Further Integration? The Case of Economic and Monetary Union. College of Europe Policy Brief #6.17, June 2017

Executive Summary > Although the United Kingdom obtained an optout from Economic and Monetary Union (EMU), its departure from the European Union (EU) will have important effects on EMU’s development. > These effects will be felt through three primary channels: > First, Brexit will create more pressure on the euro-outs to adopt the euro; > Second, it will alter existing alliances within the EU that by extension will affect the trajectory of euro area integration; > Finally, EU legislative reforms post-Brexit open up windows of opportunity to make the euro area more robust

Papers prepared for the Colloquium "Working for Europe: Perspectives on the EU 50 Years after the Treaties of Rome"

The Chamber of Representatives of the Belgian Parliament asked the permanent professors of the College of Europe to write brief papers for a conference organized in honour of the 50th anniversary of the Treaty of Rome. The objective of these papers was to highlight the main challenges facing the European Union in four different issue areas (Lisbon Strategy, enlargement, Neighbourhood Policy and institutional reform) and to generate a debate among Belgian academics, politicians and members of civil society. The papers produced used to promote this discussion are reprinted here

The Gravity Equation in International Economics and International Business Research: A Note

This note discusses methodological issues and practical concerns for international economists and international business scholars who apply the gravity equation in their research. The most important message of the note is that this equation should correct for multilateral resistance factors. We propose a relatively low-cost specification and estimation to implement such correction, which is robust in the presence of various endogeneity effects and non-stationary variables. In the presence of zero-values in the dataset, however, the multilateral specification is best estimated with a Poisson maximum likelihood.gravity equation, international trade, foreign direct investment, methodology

Dynamic communicability and epidemic spread: a case study on an empirical dynamic contact network

We analyze a recently proposed temporal centrality measure applied to an empirical network based on person-to-person contacts in an emergency department of a busy urban hospital. We show that temporal centrality identifies a distinct set of top-spreaders than centrality based on the time-aggregated binarized contact matrix, so that taken together, the accuracy of capturing top-spreaders improves significantly. However, with respect to predicting epidemic outcome, the temporal measure does not necessarily outperform less complex measures. Our results also show that other temporal markers such as duration observed and the time of first appearance in the the network can be used in a simple predictive model to generate predictions that capture the trend of the observed data remarkably well.Comment: 31 pages, 15 figures, 11 tables; typos corrected; references added; Figure 3 added; some changes to the conclusion and introductio

The (Ever) Incomplete Story of Economic and Monetary Union

This article applies the governance typology used in this special issue to the evolution of euro area governance. The article begins with a description of Economic and Monetary Union’s original governance structure, with third order governance (shared norms) present in varying degrees in monetary, financial and fiscal governance. While a shared consensus on the importance of an independent central bank to pursue price stability allowed for the creation of the European Central Bank, euro area governance was otherwise limited to the coordination of national policies. Since the crisis, shifting norms (third order governance) allowed for the creation of new bodies (e.g. the European Stability Mechanism and the Single Supervisory Mechanism) and the expansion of the powers of existing institutions (particularly the ECB). In areas where no normative changes occurred (fiscal and economic policy coordination), second order governance has been marked by incremental changes to existing institutions. The degree to which economic governance has become more hierarchical depends both on the strength of third order governance norms and the preferences of large states like Germany either to retain their own sovereignty or create additional rules that bind member states