Vortrag
Trade Persistence and the Limits of Trade Agreements

Florian Mölders


11th GEP Annual Postgraduate Conference : Nottingham Centre for Research on Globalisation and Economic Policy (GEP)
Nottingham, Großbritannien, 26.04.2012 - 27.04.2012



Abstract:
The trade creating effect of trade agreements reveals a high level of heterogeneity.This paper is concerned with network structures as drivers of this difference in the magnitude. Linking export networks with per-capita income levels, it is claimed that more developed countries are associated with smaller increases in bilateral trade flows if an agreement is present, compared to lower-income countries. This gives rise to a re-assessment of trade agreements and hence of economic policy. While they are a powerful tool for trading partners at the lower end of the per-capita income distribution, they are less so at the upper end.

Abstract

The trade creating effect of trade agreements reveals a high level of heterogeneity.This paper is concerned with network structures as drivers of this difference in the magnitude. Linking export networks with per-capita income levels, it is claimed that more developed countries are associated with smaller increases in bilateral trade flows if an agreement is present, compared to lower-income countries. This gives rise to a re-assessment of trade agreements and hence of economic policy. While they are a powerful tool for trading partners at the lower end of the per-capita income distribution, they are less so at the upper end.



Keywords: Trade agreements, Gravity model, Trade persistence
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