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Title:Trade Persistence and the Limits of Trade Agreements PDF Logo
Authors:Moelders, Florian
Issue Date:2011
Series/Report no.:Proceedings of the German Development Economics Conference, Berlin 2011 58
Abstract:International trade ows reveal strong persistence over time. This paper is concerned with the role of trade agreements in this persistent environment. The data reveal a high level of heterogeneity of the trade- creating effect along the trade volume and per-capita income distributions. If controlled for persistence in bilateral trade ows, I find that higher per- capita incomes are associated with smaller increases in bilateral trade ows if an agreement is present, compared to lower-income countries. This gives rise to a re-assessment of trade agreements and hence of economic policy. While they are a powerful tool for trading partners at the lower end of the per-capita income distribution, they are less so at the upper end.
Subjects:Trade agreements
Gravity model
Trade persistence
JEL:F10
F13
F15
Document Type:Conference Paper
Appears in Collections:Proceedings of the German Development Economics Conference, 2011 (Berlin)

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