The Schengen Agreement has guaranteed unchecked travel across internal EU borders since 1995. Has it also facilitated trade flows? Our econometric analysis suggests that Schengen has boosted trade by 3% on average (equivalent to a drop in tariffs by 0.7 percentage points). Goods trade is more...

We develop a novel two-stage methodology that allows us to study the empirical determinants of the ex post effects of past free trade agreements (FTAs) as well as obtain ex ante predictions for the effects of future FTAs. We first identify 908 unique estimates of the effects of FTAs on different...

This paper documents the novel fact that Regional Trade Agreements (RTA) decrease bilateral trade imbalances as measured by conventional measure of the net export share in gross trade. While on average an RTA decreases bilateral trade imbalance by 7%, greater trade integration through a deeper...

This paper shows that a regional bias resulting from trade integration alters the transmission of a countryś monetary policy by shifting the burden of the exchange rate adjustment towards the less integrated trading partners. I first develop a simple model which illustrates how a concentration...

The COVID-19 pandemic initially caused some international trade distortions, most of which were temporary, since international goods trade flows recovered their pre-pandemic levels by the end of 2020. Against this background, geopolitical factors are gaining traction in shaping cross-border...

This paper shows that regional trade integration shifts the burden of the exchange rate adjustment towards the less integrated trading partners. Thus, they bear the cost of trade balance expansion, while competitive exchange rate moves vis-a-vis RTA trading partners result in no expansion or...