Tammy Holmes () (IUHEI, The Graduate Institute of International Studies, Geneva)
Abstract
Economists have recently begun trying to explain that pattern of Regional Trade Agreement (RTA) formation around the world. This paper adds to the developing literature by taking into account the fact that many of the RTAs signed are not effectively implemented. The analysis proceeds in two steps: the gravity model is used to establish which RTAs are effectively implemented, in the sense that they positively and significantly increase trade flows between member countries compared to the flows predicted by the gravity model; second a hypothesis is tested about the pattern of effective RTAs – that successful RTAs are found between pairs of countries which send a large share of their exports to each other’s markets. Convincing evidence is found to support this hypothesis, including evidence that export interest from one partner alone does not improve the probability of an effective RTA.
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Publisher Info
Paper provided by Economics Section, The Graduate Institute of International Studies in its series HEI Working Papers with number
07-2005.
References listed on IDEAS Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
Richard E. Baldwin, 1997.
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The World Economy,
Blackwell Publishing, vol. 20(7), pages 865-888, November.
[Downloadable!] (restricted)
Other versions:
Alberto Alesina & Robert J. Barro & Silvana Tenreyro, 2002.
"Optimal Currency Areas,"
NBER Working Papers
9072, National Bureau of Economic Research, Inc.
[Downloadable!] (restricted)
Other versions:
Alberto Alesina & Robert J. Barro & Silvana Tenreyro, 2003.
"Optimal Currency Areas,"
NBER Chapters,
in: NBER Macroeconomics Annual 2002, Volume 17, pages 301-356
National Bureau of Economic Research, Inc.
[Downloadable!]
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