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A Bayesian spatial probit estimation of Free Trade Agreement contagion

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Abstract

This paper analyzes the spatial interdependence of Free Trade Agreements (FTAs) in a cross-section framework using the Conta-gion Index proposed by Baldwin and Jaimovich (2010). A Bayesian heteroskedastic probit model is estimated, where a spatial lag is built based on the Contagion Index, finding evidence of interdependence related with a domino-like effect. I compare the results with simple probit estimations and other spatial specifications.

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Bibliographic Info

Paper provided by Economics Section, The Graduate Institute of International Studies in its series IHEID Working Papers with number 07-2010.

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Date of creation: 15 Jun 2010
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Handle: RePEc:gii:giihei:heidwp07-2010

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Keywords: Contagion Index; Free Trade Agreements; Spatial probit;

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Cited by:
  1. Baldwin, Richard & Jaimovich, Dany, 2009. "Are Free Trade Agreements Contagious?," CCES Discussion Paper Series 12, Center for Research on Contemporary Economic Systems, Graduate School of Economics, Hitotsubashi University.

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