International Journal of Business and Economics Volume 7, No. 2 August, 2008

Is Bilateralism Consistent with Global Free Trade?

Daniel E. May

Business School, University of Wolverhampton, U.K.

Abstract

Some studies show that bilateralism is consistent with global free trade under pairwise stability. By using an alternative stability concept we find that this is not always the case. Nonetheless, a system of transfers could help to stabilize this condition.

Keywords：bilateralism, global free trade, network equilibrium.

JEL Classifications：F12, F13.

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