Structural new trade theory models have never been used to evaluate and quantify the role of preferential agreement (PTA) membership for in a way which is consistent with general equilibrium. Apart from filling this gap, present paper aims at delivering an empirical model takes into account both that PTA endogenous world matrix bilateral flows contains numerous zero entries. These features are treated encompassing by means (possibly two-part) Poisson pseudo-maximum likelihood estimation...

Abstract Recent work on the effects of currency unions (CUs) trade stresses importance using many countries and years in order to obtain reliable estimates. However, for large samples, computational issues associated with three‐way (exporter‐time, importer‐time, country pair) fixed currently recommended gravity literature have heretofore limited choice estimator, leaving an important methodological gap. To address this gap, we introduce iterative poisson pseudo‐maximum likelihood (PPML)...

Abstract We propose a simple method to identify the effects of unilateral and non‐discriminatory trade policies on bilateral within theoretically consistent empirical gravity model. Specifically, we argue that structural estimations should be performed with data include not only international flows but also intra‐national flows. The use sales allows identification such as most favoured nation tariffs, even in presence exporter importer fixed effects. A byproduct our approach is it can used...

Abstract We develop a simple procedure for general equilibrium comparative static analysis of gravity models. Non‐linear solvers are replaced by (constrained) regressions using theoretical properties the Poisson pseudo‐maximum‐likelihood estimator. Our GEPPML can readily be implemented in any software capable estimating constrained The accommodates calibrated as well estimated trade costs while estimation power structural to generate GE statics. Using GEPPML, we quantify effects hypothetical...

We challenge the common practice of estimating gravity equations with interval or averaged data in order to capture dynamic‐adjustment effects trade‐policy changes. Instead, we point a series advantages using consecutive‐year recognizing effects. Our analysis reveals that, relative data, use avoids downward‐biased effect estimates due distribution events during an event window as well anticipation (pre‐interval) and delayed (post‐interval) effects, it improves efficiency more data.

Abstract We show that the creation of first integrated multi-modal pan-European transport network during Roman times influences economic integration over two millennia. Drawing on spatially highly disaggregated data excavated ceramics, we document contemporary interregional trade was influenced by connectivity within network. Today, these differentials continue to influence as approximated cross-regional firm investment behaviour. Continuity is partly explained selective infrastructure...

Abstract Starting with Tinbergen (1962, Shaping the world economy: Suggestions for an international economic policy , The Twentieth Century Fund), quantifying effects of regional trade agreements (RTAs) on flows has always been among most popular topics in literature. Also not surprisingly, to estimate RTAs, researchers and analysts have relied workhorse model trade—the gravity equation. Over past 60 years, there many important developments RTA literature, both terms better methods quantify...

International cooperation is at the core of multilateral climate policy. How its effectiveness harmed by individual countries not participating in global mitigation effort? We use a multi-sector structural trade model with carbon emissions from production and constant elasticity fossil fuel supply function to simulate consequences unilateral non-participation Paris Agreement. Taking into account both direct leakage effects, we find that US would eliminate more than third world reduction...

Journal Article Macroeconomic potentials of transatlantic free trade: a high resolution perspective for Europe and the world Get access Gabriel Felbermayr, Felbermayr Ludwig Maximilians University Munich, Ifo Institute CESifo; Bayreuth; Bayreuth, CESifo, GEP Institute; CESifo Search other works by this author on: Oxford Academic Google Scholar Benedikt Heid, Heid Mario Larch, Larch Erdal Yalcin 1 We thank discussants, seminar participants at 60th Panel Meeting Economic Policy in October 2014...

We capitalize on the latest developments in empirical structural gravity literature to revisit question of whether and how much does GATT/WTO membership affect international trade. are first capture non-discriminatory nature commitments by measuring effects trade relative domestic sales. These unilateral found be large, positive, statistically significant. also obtain bilateral estimates, which larger than those reported literature. In particular, our results imply that, average, joining...

We propose and apply methods to quantify the impact of national institutions on international trade development. are able identify direct country-specific within structural gravity framework. Our approach naturally addresses prominent issue endogenous institutions. The empirical analysis offers robust evidence that stronger promote trade. A counterfactual reveals changes in institutional quality poor countries our sample between 1996 2006 have had, via their imports from rich countries,...

Abstract We study the impact of economic sanctions on international trade in mining sector. demonstrate that gravity equation is well‐suited to model bilateral costs and find have been effective impeding trade. Complete reduced by about 44% average. also document significant heterogeneity effects across industries, sanction episodes/cases, depending sanctioning sanctioned countries, type sanctions, direction take a close look at recent Iran Russia.

Abstract Economic sanctions are more popular than ever. But do they affect agricultural trade? Combining two new datasets and capitalizing on the latest developments in empirical structural gravity literature, we investigate effects of international trade products. We find that impede trade, whereas other not show any significant impact. Complete have led to about a 67% decrease between sanctioned sanctioning countries, or corresponding tariff equivalent 25%, also obtain estimates for...