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Terms of Trade and Global Efficiency Effects of Free Trade Agreements, 1990-2002

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  • James E. Anderson
  • Yoto V. Yotov

Abstract

This paper infers the terms of trade effects of Free Trade Agreements (FTA's) with the structural gravity model. Using panel data methods to resolve two way causality between trade and FTA's, we estimate direct FTA effects on bilateral trade volume in 2 digit manufacturing goods from 1990-2002. We deduce the terms of trade changes implied by these volume effects for 40 countries plus a rest-of-the-world aggregate. Some gain over 10%, some lose less than 0.2%. Overall, using a novel measure of the change in iceberg melting, global efficiency rises 0.62%.

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Bibliographic Info

Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 17003.

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Date of creation: Apr 2011
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Handle: RePEc:nbr:nberwo:17003

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References

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Citations

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Cited by:
  1. Olivier Cadot & Anne-Célia Disdier & Lionel Fontagné, 2012. "North-South Standards Harmonization and International Trade," PSE - G-MOND WORKING PAPERS hal-00961733, HAL.
  2. Dai, Mian & Yotov, Yoto V. & Zylkin, Thomas, 2014. "On the trade-diversion effects of free trade agreements," Economics Letters, Elsevier, Elsevier, vol. 122(2), pages 321-325.
  3. Benedikt Heid & Mario Larch, 2012. "International Trade and Unemployment: A Quantitative Framework," CESifo Working Paper Series 4013, CESifo Group Munich.
  4. Alberto Behar & Benjamin D. Nelson, 2012. "Trade Flows, Multilateral Resistance, and Firm Heterogeneity," IMF Working Papers 12/297, International Monetary Fund.
  5. Jeffrey H., Larch, Mario Bergstrand & Yoto V. Yotov, 2013. "Economic Integation Agreements, Border Effects, and Distance Elasticities in the Gravity Equation," CESifo Working Paper Series 4502, CESifo Group Munich.
  6. repec:hal:psewpa:hal-00961733 is not listed on IDEAS
  7. James E. Anderson & Catherine A. Milot & Yoto V. Yotov, 2011. "The Incidence of Geography on Canada's Services Trade," NBER Working Papers 17630, National Bureau of Economic Research, Inc.
  8. Rod Falvey & Neil Foster-McGregor, 2013. "On the Trade and Price Effects of Preferential Trade Agreements," wiiw Working Papers 102, The Vienna Institute for International Economic Studies, wiiw.
  9. Dai, Mian & Yotov, Yoto & Zylkin, Thomas, 2013. "On the Trade-diversion Effects of Free Trade Agreements," School of Economics Working Paper Series, LeBow College of Business, Drexel University 2013-3, LeBow College of Business, Drexel University, revised 08 Oct 2013.
  10. Sami Bensassi & José de Sousa & Joachim Jarreau, 2013. "Preferential Trade Agreements Proliferation: Sorting out the Effects," Working Papers 2013-04, CEPII research center.
  11. repec:hal:journl:hal-00975529 is not listed on IDEAS
  12. Robert C. Johnson & Guillermo Noguera, 2012. "Fragmentation and Trade in Value Added over Four Decades," NBER Working Papers 18186, National Bureau of Economic Research, Inc.
  13. Nitsch, Volker & Besedes, Tibor, 2013. "Trade Integration and the Fragility of Trade Relationships: A Product Level Perspective," Annual Conference 2013 (Duesseldorf): Competition Policy and Regulation in a Global Economic Order 79977, Verein für Socialpolitik / German Economic Association.
  14. María Pía Olivero & Yoto V. Yotov, 2012. "Dynamic gravity: endogenous country size and asset accumulation," Canadian Journal of Economics, Canadian Economics Association, Canadian Economics Association, vol. 45(1), pages 64-92, February.
  15. Cipollina, Maria & Laborde, David & Salvatici, Luca, 2013. "Do Preferential Trade Policies (Actually) Increase Exports? An analysis of EU trade policies," 2013 Annual Meeting, August 4-6, 2013, Washington, D.C., Agricultural and Applied Economics Association 150177, Agricultural and Applied Economics Association.

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