Trade Liberalization or Oil Shocks: Which Explains Structural Breaks in International Trade Ratios?
AbstractBen-David and Papell's (1997) tests for structural breaks in international trade ratios over the post-WWII period revealed that trade ratios exhibited structural breaks in their paths and that postbreak trade averages exceeded prebreak averages. They attributed these breaks to trade liberalization policies executed during the postwar period. We reevaluate their results by comparing the postbreak trade ratios with extrapolated ratios based on the prebreak trend, and testing for structural breaks in the relative prices of imports (exports). We find that oil shocks rather than trade liberalization were the major factor behind the structural breaks in trade ratios.
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Bibliographic InfoPaper provided by Ben-Gurion University of the Negev, Department of Economics in its series Working Papers with number 227.
Length: 34 pages
Date of creation: Dec 2006
Date of revision:
Publication status: Published in Review of International Economics as: Abu-Bader, S. and Abu-Qarn, A. S. (2010) “Trade Liberalization or Oil Shocks: Which Better Explains Structural Breaks in International Trade Ratios?,” Review of International Economics, 18(2), pages 250–264.
International trade; Trade Liberalization; Structural change; Oil shocks; Kennedy Round;
Find related papers by JEL classification:
- C22 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models &bull Diffusion Processes
- F1 - International Economics - - Trade
This paper has been announced in the following NEP Reports:
- NEP-ALL-2007-01-14 (All new papers)
- NEP-ENE-2007-01-14 (Energy Economics)
- NEP-INT-2007-01-14 (International Trade)
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