Due to the lack of Purchasing Power Parities (PPPs) at regional level, regional Gross Domestic Product (GDP) figures have been traditionally adjusted using national PPPs. The simplifying assumption that all regions of a country have the same cost of living, and implicitly that there are no...

Trade flows are significantly affected by the trade agreements both with respect to impacts on pre-existing trade flows, (intensive margin) and on new, previously non-existent trade flows (extensive margin). The effect of the Regional Trade Agreements on pre-existing trade flows are found to be...