Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/185923
Authors: 
Jung, Benjamin
Year of Publication: 
2009
Citation: 
[Journal:] Swiss Journal of Economics and Statistics [ISSN:] 2235-6282 [Volume:] 145 [Year:] 2009 [Issue:] 4 [Pages:] 421-442
Abstract: 
In this paper, I introduce a trade-promoting "invisible asset" into the standard Krugman (1980) model of international trade. It can be interpreted as trust that accumulates as an externality in proportion to successful international transactions. I use this framework to theoretically derive a dynamic gravity equation and to discuss adjustment dynamics. I provide new evidence on adjustment rates of bilateral trade flows. On average, 23% of the gap to the steady-state trade flow are closed each year. However, dynamic regressions yield long-run trade policy effects which are comparable to static estimates.
Subjects: 
International bilateral trade
Gravity model
Trust
Dynamic panel data
JEL: 
F14
F15
Persistent Identifier of the first edition: 
Creative Commons License: 
https://creativecommons.org/licenses/by/4.0/
Document Type: 
Article

Files in This Item:
File
Size
189.22 kB





Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.