International trade and fragmentation of production lead to increased trade in intermediate goods. Increased multi-stage production promotes the formation of free-trade agreements (FTA). In this paper, the relationship between intermediates trade and FTAs is examined with a two-step Pseudo...

International trade and fragmentation of production lead to increased trade in intermediate goods. Increased multi-stage production promotes the formation of free-trade agreements (FTA). In this paper, the relationship between intermediates trade and FTAs is examined with a two-step Pseudo...

Gravity equations have been used for more than 50 years to estimate ex post the partial effects of trade costs on international trade flows, and the well-known - and traditionally presumed exogenous - "trade-cost elasticity" plays a central role in computing general equilibrium trade-flow and...