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Does the WTO Make Trade More Stable?

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  • Rose, Andrew

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 dataset 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 dataset. There is little evidence that membership in the GATT/WTO has a significant dampening effect on trade volatility.

Suggested Citation

  • Rose, Andrew, 2004. "Does the WTO Make Trade More Stable?," CEPR Discussion Papers 4246, C.E.P.R. Discussion Papers.
  • Handle: RePEc:cpr:ceprdp:4246
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    References listed on IDEAS

    as
    1. 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.
    2. 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.
    3. 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.
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    More about this item

    Keywords

    Volatility; Empirical; Data; Bilateral; Coefficient; Variation; Panel; International; Flow;
    All these keywords.

    JEL classification:

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

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