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Does the WTO Make Trade More Stable?

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  • Andrew Rose

Abstract

I examine the hypothesis that membership in the World Trade Organization (WTO) and its predecessor the General Agreement on Tariffs and Trade (GATT) has increased the stability and predictability of trade flows. I use a large data set covering annual bilateral trade flows between over 175 countries between 1950 and 1999, and estimate the effect of GATT/WTO membership on the coefficient of variation in trade computed over 25-year samples, controlling for a number of factors. I also use a comparable multilateral data set. There is little evidence that membership in the GATT/WTO has a significant dampening effect on trade volatility. Copyright Springer Science + Business Media, Inc. 2005

Suggested Citation

  • Andrew Rose, 2005. "Does the WTO Make Trade More Stable?," Open Economies Review, Springer, vol. 16(1), pages 7-22, January.
    • Handle: RePEc:kap:openec:v:16:y:2005:i:1:p:7-22
    DOI: 10.1007/s11079-005-5329-9
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    References listed on IDEAS

    as
    1. Subramanian, Arvind & Wei, Shang-Jin, 2007. "The WTO promotes trade, strongly but unevenly," Journal of International Economics, Elsevier, vol. 72(1), pages 151-175, May.
    2. James E. Anderson & Eric van Wincoop, 2003. "Gravity with Gravitas: A Solution to the Border Puzzle," American Economic Review, American Economic Association, vol. 93(1), pages 170-192, March.
    3. Andrew K. Rose, 2004. "Do We Really Know That the WTO Increases Trade?," American Economic Review, American Economic Association, vol. 94(1), pages 98-114, March.
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    More about this item

    Keywords

    volatility; empirical; data; bilateral; coefficient of variation; panel; international; flow;
    All these keywords.

    JEL classification:

    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations

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