Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/48335
Authors: 
Moelders, Florian
Year of Publication: 
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

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