We construct a dynamic theory of civil conflict hinging on inter-ethnic trust and trade. The model economy is … inhabitated by two ethnic groups. Inter-ethnic trade requires imperfectly observed bilateral investments and one group has to form … beliefs on the average propensity to trade of the other group. Since confict disrupts trade, the onset of a conflict signals …

trades, and convincing explanations of the persistence of the Indo-Central Asian trade (for example) despite the growing Indo …-European trade from the seventeenth-century. The customs-union model usefully approximates this trading-situation (i.e. the Europeans … the possibility for trade-creation (i.e. due to substitution between otherwise regionally-specialised production …

per capita incomes across economies and the spatial advance of free trade. For many economists and historians the two are … linked: the reduction of trade barriers in the post-war world ushered in a new era of globalisation and that globalisation in … then it would represent one of the most important transitions of the twentieth century. Free trade was championed by the …

percent. 2 And the growth of world trade during thisperiod far exceeded the expansion of world output. Growth rates of …

This paper analyses trade specialisation dynamics in two Eastern European countries(Romania and Bulgaria – EEC-2) vis …

, relative productivity, the trade balance and terms of trade. Countries with higher productivity, trade deficits or improved … terms of trade are found to have more appreciated real exchange rates, with the main channel of transmission working through … the relative price of nontraded goods. Exogenous terms of trade shocks are found to be the most important determinant of …