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On the Impacts of Economic Freedom on International Trade Flows: Asymmetries and Freedom Components

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Author Info

  • Robert J. Sonora

    ()
    (Department of Economics, School of Business Administration, Fort Lewis College)

Abstract

This paper employs a gravity equation to estimate the effects of economic freedom on U.S. consumer exports and imports for 131 countries over the years 2000 - 2005. Using the newly updated Fraser Institute's Economic Freedom of the World Index, we find that increased economic freedom in the rest of the world would increase the United States' overall trade volume. We also consider whether imports and exports are affected asymmetrically with respect to income, transaction costs, and economic freedom. We find considerable differences in how these variables affect imports and exports of consumer goods. Our results also give some insight into how economic freedom might affect the U.S. trade position.

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File URL: http://web.efzg.hr/repec/pdf/Clanak%2008-05.pdf
File Function: First version, 2008
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Bibliographic Info

Paper provided by Faculty of Economics and Business, University of Zagreb in its series EFZG Working Papers Series with number 0805.

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Length: 31
Date of creation: 24 Jun 2008
Date of revision:
Handle: RePEc:zag:wpaper:0805

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Keywords: gravity model; trade flows; trade balance;

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