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The Effect of GATT/WTO on Export and Import Price Volatility


  • Vinh T. H. Cao
  • Lisandra Flach


type="main" xml:id="twec12228-abs-0001"> Despite much interest and discussion concerning the trade-promoting effects of membership in multilateral trade agreements, little is known about the effect of membership on world trade prices. This paper fills this gap by studying the effects of membership on export and import price volatility. We document a surprisingly strong and robust empirical regularity: GATT/WTO membership reduces the volatility of prices over time for both import and export countries, with similar results found for free trade agreements. We show that results are not driven by sample selection or endogeneity concerns and that the effect is captured by members subject to rigorous accession procedures.

Suggested Citation

  • Vinh T. H. Cao & Lisandra Flach, 2015. "The Effect of GATT/WTO on Export and Import Price Volatility," The World Economy, Wiley Blackwell, vol. 38(12), pages 2049-2079, December.
  • Handle: RePEc:bla:worlde:v:38:y:2015:i:12:p:2049-2079

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    Cited by:

    1. Flach, Lisandra & Gräf, Fabian, 2020. "The impact of trade agreements on world export prices," Munich Reprints in Economics 70372, University of Munich, Department of Economics.
    2. Beatriz de Blas & Katheryn N. Russ, 2015. "Understanding Markups in the Open Economy," American Economic Journal: Macroeconomics, American Economic Association, vol. 7(2), pages 157-180, April.
    3. Lisandra Flach & Fabian Gräf, 2018. "The Impact of Trade Agreements on World Export Prices," CESifo Working Paper Series 7032, CESifo.

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