I develop an index for economic integration accounting for its gradual and bilateral nature: the Gradual And Bilateral Integration (GABI) index. The graduality captures differences in the depth and path of five stages in economic integration and is an improvement over the use of binary dummy...

We derive a real gravity equation and gain several new insights that were hidden in the nominal specification used so far. Most importantly, the real effective exchange rate (REER) of the exporter and, via the importer's terms of trade, also the importer's REER matter, and we can identify the...

Fixed effects (FE) in panel data models overlap each other and prohibit the identification of the impact of ''constant'' regressors. Think of regressors that are constant across countries in a country-time panel with time FE. The traditional approach is to drop some FE and constant regressors by...

I develop an index for economic integration accounting for its gradual and bilateral nature: the Gradual And Bilateral Integration (GABI) index. The graduality captures differences in the depth and path of five stages in economic integration and is an improvement over the use of binary dummy...

Convergence in gross domestic product series of five European countriesis empirically identified using multivariate time series models that arebased on unobserved components with dynamic converging properties.We define convergence in terms of a decrease in dispersion over timeand model this...