Despite widespread anecdotal evidence that lower trade barriers increase international trade, there is little firm quantitative evidence of the ‘trade-cost elasticity’ of trade flows, one of the two key aggregate statistics that have recently been identified as sufficient to quantify the...

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...

This paper compares various estimation methods often used in the estimation of gravity models of international trade. The authors first discuss different structural and consistent estimation techniques, their underlying assumptions and their impact on estimated coefficients. They then estimate...