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Gravity Approach to the Impact of Crises on MERCOSUR Trade

Author

Listed:
  • Germán González

    (UNS/CONICET)

  • Victoria Giordano

    (UNS)

Abstract

The proliferation of regional trade agreements (RTAs) and the contagion of crises characterised the pre-pandemic global economy. Both are crucial for developing countries. This paper aimed to provide evidence on the impact of crises on RTAs by studying the behaviour of trade flows and using MERCOSUR as a case study. We based our empirical strategy on a traditional gravity approach, differentiating according to the origin of the crises and the type of exported goods. We confirm that MERCOSUR has been able to mitigate external and domestic shocks, but has exacerbated the effects of regional ones. Our findings point to the difficulties in consolidating the industrialisation process in the context of macroeconomic vulnerability and volatility, even despite the existence of RTAs.

Suggested Citation

  • Germán González & Victoria Giordano, 2023. "Gravity Approach to the Impact of Crises on MERCOSUR Trade," Working Papers 280, Red Nacional de Investigadores en Economía (RedNIE).
    • Handle: RePEc:aoz:wpaper:280
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    File URL: https://rednie.eco.unc.edu.ar/files/DT/280.pdf
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    References listed on IDEAS

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