The paper was prepared as a FIW report and presents an overview of the recent developments in Austrian foreign trade. The first part of the discussion is focusing on the key developments in Europe during the economic and debt crisis and in other relevant countries. It provides an input framework...

We estimate a linear approximation of the market potential function for Europe as derived in geography and trade models. Using a spatial econometric estimation approach, border effects are identified by a differential impact of other regions’ purchasing power, depending on whether two regions...