Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/226257 
Year of Publication: 
2020
Series/Report no.: 
CESifo Working Paper No. 8555
Publisher: 
Center for Economic Studies and Ifo Institute (CESifo), Munich
Abstract: 
We build on the latest developments in the structural gravity literature to quantify the partial and general equilibrium effects of GATT/WTO membership on trade and welfare. Using an extensive database covering manufacturing trade for 186 countries over the period 1980-2016, we find that the average impact of GATT/WTO membership on trade among member counties is large, positive, and significant. We contribute to the literature by estimating country-specific estimates and find them to vary widely across the countries in our sample with poorer members benefitting more. Using these estimates, we simulate the general equilibrium effects of GATT/WTO on welfare, which are sizable and heterogeneous across members, and relatively small for non-member countries. We show that countries not experiencing positive trade effects from joining GATT/WTO can still gain in terms of welfare, due to beneficial terms-of-trade effects.
Subjects: 
GATT
WTO
heterogeneous policy effects
structural gravity
welfare
JEL: 
F10
F13
F14
Document Type: 
Working Paper
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