Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/142588
Authors: 
Campbell, Douglas L.
Year of Publication: 
2010
Series/Report no.: 
EERI Research Paper Series 26/2010
Abstract: 
What determines trade patterns? Habit persistence in consumer tastes and learning-by-doing in production imply that history and culture matter. Deriving a dynamic gravity equation from a simple model, it is shown that cultural similarity is a product of history, so that trade patterns are a function of bilateral GDP, current trade costs, and the past history of trade costs. Using a trade data set which spans from 1870 to 2000, I demonstrate that many gravity variables operate via lagged trade, that historical trade shocks matter, and that trade patterns are persistent, even across centuries.
Subjects: 
Dynamic Gravity Equation
Endogenous Preferences
Habit Persistence
Learning By-Doing
JEL: 
F10
F12
F22
N70
Document Type: 
Working Paper

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