Economics of global interactions: Introduction to the special issue

The catalyst for the collection of papers included in this special issue was the 2013 International Conference on “Economics of Global Interactions” held in Bari (Italy), a yearly event that is currently on its 6th edition. This scientific event is build around the idea of bringing together economists which employ different, though strictly connected, prisms of analysis to the study of global interactions. This special issue represents a combination of novel empirical and theoretical approaches surrounding the borders of international trade, factor mobility and international development. The paper by Kawabata and Takarada analyses the welfare effects of free trade agreements (FTAs) in a three-country model characterized by oligopolistic competition. The novelty of the analysis is related to an explicit investigation on the role of product differentiation. The authors highlight a potential welfare improvements of FTAs for both member and non-member countries when product differentiation is accounted for. The authors also contribute to the debate on the nexus between FTAs and multilateral trade liberalization. In particular they find that when the products offered by competing oligopolistic firms are near substitute, FTA might represent a stumbling block to multilateral trade liberalization when firms compete à la Bertrand while the opposite happens when firms compete à la Cournot. Kondoh and Coniglio focus on international policy interactions related to another important global phenomenon, i.e. international migration. In a three-country setting, where two rich countries attract immigrants from a large poor country, the authors highlight policy externalities stemming from the adoption of heterogeneous and asymmetric immigration policies and emphasize possible welfare distortions arising from deeper labor market integration between the two rich countries. The issues raised in this work are particularly interesting in the context of the European Union where deep market(This abstract was borrowed from another version of this item.)