Over the time a large number of reciprocal preferential trade agreements (RTAs) have been concluded among countries. Recently many studies have used gravity equations in order to estimate the effect of RTAs on trade flows between partners. These studies report very different estimates, since...

For more than forty years, the gravity equation has been a workhorse for cross-country empirical analyses of international trade flows and, in particular, the effects of free trade agreements (FTAs) on trade flows. However, the gravity equation is subject to the same econometric critique as...

For more than forty years, the gravity equation has been a workhorse for cross-country empirical analyses of international trade flows and, in particular, the effects of free trade agreements (FTAs) on trade flows. However, the gravity equation is subject to the same econometric critique as...

We challenge the common practice of estimating gravity equations with time-interval data in order to capture dynamic-adjustment effects to trade-policy changes. Instead, we point to a series of advantages of using consecutive-year data recognizing dynamic-adjustment effects. Our analysis reveals...

The study of Economics as a discipline of Social Sciences has attracted a significant number of cross – disciplinary researches. A lot of emphasis has been bestowed upon the applications and implementations of the universal laws and results approved by the ‘natural' disciplines of Physical...

This paper proposes a novel approach of classifying and modeling the nonlinear behavior of commodity prices using regime-switching models with exogenous transition variables. The approach rests on using the International Commercial Terms (Incoterms), also known as border prices, to classify...

This paper revisits the relationship between international trade and economic growth. We measure trade openness indices separately with respect to intermediate inputs and final goods and find that it is the former which turns out to be significant in explaining growth gains from trade. Using...

Conventional economic wisdom predicts that free and competitive international trade should cause economies GDP to converge over the long run. Empirical evidence of sixteen developed countries suggests that the countries did converge in terms of labour productivity over the period of 1870 to...

One of the best established empirical results in international economics is that bi-lateral trade decreases with distance. Although well-known, these results have not been systematically analyzed before. We examine 1052 distance effects estimated in 78 papers. Information collected on each...