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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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Citations

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Cited by:
  1. Heid, Benedikt & Larch, Mario, 2013. "International Trade and Unemployment: A Quantitative Framework," Annual Conference 2013 (Duesseldorf): Competition Policy and Regulation in a Global Economic Order 79824, Verein für Socialpolitik / German Economic Association.
  2. Alberto Behar & Benjamin D. Nelson, 2012. "Trade Flows, Multilateral Resistance, and Firm Heterogeneity," IMF Working Papers 12/297, International Monetary Fund.
  3. Anne-Célia Disdier & Lionel Fontagné & Olivier Cadot, 2014. "North-South Standards Harmonization and International Trade," PSE - Labex "OSE-Ouvrir la Science Economique" hal-00975529, HAL.
  4. Olivier Cadot & Anne-Célia Disdier & Lionel Fontagné, 2012. "North-South Standards Harmonization and International Trade," PSE Working Papers hal-00961733, HAL.
  5. Sami Bensassi & José de Sousa & Joachim Jarreau, 2013. "Preferential Trade Agreements Proliferation: Sorting out the Effects," Working Papers 2013-04, CEPII research center.
  6. 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.
  7. Olivier Cadot & Anne-Célia Disdier & Lionel Fontagné, 2012. "North-South Standards Harmonization and International Trade," PSE - G-MOND WORKING PAPERS hal-00961733, HAL.
  8. repec:hal:journl:hal-00975529 is not listed on IDEAS
  9. 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.
  10. 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.
  11. Dai, Mian & Yotov, Yoto & Zylkin, Thomas, 2013. "On the Trade-diversion Effects of Free Trade Agreements," School of Economics Working Paper Series 2013-3, LeBow College of Business, Drexel University, revised 08 Oct 2013.
  12. 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. 150177, Agricultural and Applied Economics Association.
  13. Bergstrand, Jeffrey & Larch, Mario & Yotov, Yoto, 2013. "Economic Integration Agreements, Border Effects, and Distance Elasticities in the Gravity Equation," School of Economics Working Paper Series 2013-7, LeBow College of Business, Drexel University.
  14. Falvey, Rod & Foster-McGregor, Neil, 2013. "On the Trade and Price Effects of Preferential Trade Agreements," CCES Discussion Paper Series 51, Center for Research on Contemporary Economic Systems, Graduate School of Economics, Hitotsubashi University.
  15. María Pía Olivero & Yoto V. Yotov, 2012. "Dynamic gravity: endogenous country size and asset accumulation," Canadian Journal of Economics, Canadian Economics Association, vol. 45(1), pages 64-92, February.
  16. Dai, Mian & Yotov, Yoto V. & Zylkin, Thomas, 2014. "On the trade-diversion effects of free trade agreements," Economics Letters, Elsevier, vol. 122(2), pages 321-325.

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