We analyze the interaction of economic and political determinants of free trade agreements (FTA). In addition to … standard trade gains, FTAs can promote peaceful relations by offering a political forum and by increasing the opportunity cost … of conflicts that disrupt trade. If policy makers believe in such pacifying effects of FTAs, country-pairs with large …

This paper analyzes empirically the relationship between civil wars and international trade. We first show that trade … presence of two effects that trade can have on the risk of civil conflicts: it may act as a deterrent if trade gains are put at … risk during civil wars but it may also act as an insurance if international trade provides a substitute to internal trade …

The majority of independent nations today were part of empires in 1945. Using bilateral trade data from 1948 to 2006 …, we examine the effect of independence on post-colonial trade. On average, there is little short run effect of trade with … the colonizer (metropole). However, after three decades trade declines more than 60%. We also find that trade between …

This paper analyses theoretically and empirically the relationship between trade and war. We show that the intuition … that trade promotes peace is only partially true even in a model where trade is beneficial to all, war reduces trade and … probability of escalation is indeed lower for countries that trade more bilaterally because of the opportunity cost associated …

shows that borders and distance impede trade by much more than tariffs or transports costs can explain. We therefore …

Quantifications of gains from trade in heterogeneous firm models assume that productivity is Pareto distributed … better fit to sales distributions—especially in the left tail. The cost of log-normal is that gains from trade depend on the … firm sales in a given market, the log-normal assumption delivers gains from trade in a symmetric two country model that can …

This chapter focuses on the estimation and interpretation of gravity equations for bilateral trade. This necessarily …

. Service trade, however, like goods trade, is subject to strong distance effects, implying that the remote supply of services … remains limited. We investigate this proposition by deriving a gravity-like equation for service trade and estimating it for a … large sample of countries and different categories of service trade. We find that distance costs are high but are declining …