The gravity model of trade is utilized to assess the impact of disintegration on trade. The analysis is based on three recent disintegration episodes involving the firmer Soviet Union, Yugoslavia and Czechoslovakia. The results point to a very strong home bias around the time of disintegration, with intra-union trade exceeding nfirmal trade approximately 43 times in the firmer Soviet Union and Czechoslovakia, and 24 times in the firmer Yugoslavia. Disintegration was followed by a sharp fall in trade intensity. Nevertheless, there is a considerable hysteresis in economic relations, with trade flows among the firmer constituent Republics still between two and 30 times greater than nfirmal trade in 1998.
Gravity Model International Trade Disintegration Panel Data