Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/226255 
Year of Publication: 
2020
Series/Report no.: 
CESifo Working Paper No. 8553
Publisher: 
Center for Economic Studies and Ifo Institute (CESifo), Munich
Abstract: 
We challenge the common practice of estimating gravity equations with time-interval data in order to capture dynamic-adjustment effects to trade-policy changes. Instead, we point to a series of advantages of using consecutive-year data recognizing dynamic-adjustment effects. Our analysis reveals that, relative to time-interval data, the proposed approach avoids downward-biased effect estimates due to the distribution of trade-policy events during an event window as well as due to anticipation (pre-interval) and delayed (post-interval) effects, and it improves the efficiency of effect estimates due to the use of more data.
Subjects: 
structural gravity
trade policy
free trade agreements
interval data
JEL: 
F10
F14
Document Type: 
Working Paper
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