Assume that government maximizes the well being of its citizens subject to technological, political, and informational constraints. How should equilibrium be perturbed so that equilibrium post-perturbation quantities satisfy new exogenously-specified bounds? We prove an intervention principle...

In this paper we construct a mechanism where any group of nations can form a welfare enhancing free trade area and, at the same time, satisfy their industrialization targets efficiently. The mechanism does not rely on cross-country transfers and, therefore, allows each member country to reap...

We investigate the limits of a mechanism for free trade area (FTA) formation that simultaneously satisfies internal industrialization targets. For arbitrary targets, we find necessary and sufficient conditions that guarantee that the mechanism is efficient for member countries individually, even...

This paper constructs a simplified framework for analyzing the welfare effects of free trade areas. We provide an alternative proof of the Panagariya-Krishna proposition on free trade areas, shortening the proof, covering a broader set of circumstances, and showing that the necessary income...

This paper identifies the most restrictive limit that rules of origin can enforce and still continue to guarantee gains from trade area formation in general settings. Many commonly used rules of origin exceed this condition in practise. Second, free trade areas generally involve unharmonized...