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...

Trade data are typically reported at the level of regions or countries and are therefore aggregates across space. In this paper, we investigate the sensitivity of standard gravity estimation to spatial aggregation. We build a model in which initially symmetric micro regions are combined to form...

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...

We provide evidence indicating that countries with well-developed social security systems do not necessarily face a trade-off between social spending and competitiveness. On average, countries that spend a lot on social needs score well in the competitiveness league. We investigate the...

At the end of June 1999 the intra-EU duty free shopping was abolished among the fifteen member nations. The opponents of this resolution argued that such a tax-free sales sector created jobs EU-wide and hardly reduced the value added and excise tax revenue of individual countries. In their...

Over the past decade, an increasing number of economies have resorted to regional trade agreements (RTAs) as a means to further the market-opening and rule-making agenda. In this context, this paper addresses the question as to whether and how selected elements of RTAs could be used as...

Krugman's (1979, 1980) monoplistic competition model of trade showed that countries with more similar per-capita GDP trade more with each other. Does this mean that developing countries shift trade towards developed countries as a result of high economic growth? The results reported in this...

This chapter discusses whether and how 'new quantitative trade models' (NQTMs) can be fruitfully applied to quantify the welfare effects of trade liberalization, thus shedding light on the trade-related effects of further European integration. On the one hand, it argues that NQTMs have indeed...

The paper examines the trend and composition of agricultural trade between Indian and Pakistan and identifies opportunities for increasing bilateral trade. It examines the bilateral agriculture trade before and after the implementation of SAFTA. The study also analyses the comparative advantage...