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The Impact Of GATT On International Trade: Evidence From Structural Break Analysis

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Listed:
  • Suleiman Abu-Bader

    () (Dept. of Economics, Ben-Gurion University of the Negev, Israel)

  • Aamer S. Abu Qarn

    () (Dept. of Economics, Ben-Gurion University of the Negev, Israel)

Abstract

In this study we test for structural changes in international trade patterns of 77 countries over the post-WWII period, to examine if they experienced a substantial increase in their trade ratios following major GATT rounds such as the Kennedy Round, or after joining GATT. Our results show that trade ratios of most of these countries exhibited structural breaks in their time paths, however, most of the postbreak paths were below the extrapolated prebreak paths. Furthermore, while the significant break years coincided closely with major regional and international events such as the oil shocks of the 70s and the East-Asian financial crisis in 1997, they occurred far before or after the time of a country's accession to GATT or the time of the major GATT rounds.

Suggested Citation

  • Suleiman Abu-Bader & Aamer S. Abu Qarn, 2007. "The Impact Of GATT On International Trade: Evidence From Structural Break Analysis," Working Papers 0712, Ben-Gurion University of the Negev, Department of Economics.
    • Handle: RePEc:bgu:wpaper:0712
    as

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    References listed on IDEAS

    as
    1. Irwin, Douglas A, 1995. "The GATT in Historical Perspective," American Economic Review, American Economic Association, vol. 85(2), pages 323-328, May.
    2. Perron, Pierre & Vogelsang, Timothy J, 1992. "Nonstationarity and Level Shifts with an Application to Purchasing Power Parity," Journal of Business & Economic Statistics, American Statistical Association, vol. 10(3), pages 301-320, July.
    3. Rose, Andrew K., 2004. "Do WTO members have more liberal trade policy?," Journal of International Economics, Elsevier, vol. 63(2), pages 209-235, July.
    4. Jeffrey D. Sachs & Andrew Warner, 1995. "Economic Reform and the Process of Global Integration," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 26(1, 25th A), pages 1-118.
    5. Paul Krugman, 1995. "Growing World Trade: Causes and Consequences," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 26(1, 25th A), pages 327-377.
    6. Subramanian, Arvind & Wei, Shang-Jin, 2007. "The WTO promotes trade, strongly but unevenly," Journal of International Economics, Elsevier, vol. 72(1), pages 151-175, May.
    7. Andrew K. Rose, 1991. "Why Has Trade Grown Faster than Income?," Canadian Journal of Economics, Canadian Economics Association, vol. 24(2), pages 417-427, May.
    8. Andrew K. Rose, 2004. "Do We Really Know That the WTO Increases Trade?," American Economic Review, American Economic Association, vol. 94(1), pages 98-114, March.
    9. Ben-David, Dan & Papell, David H., 1997. "International trade and structural change," Journal of International Economics, Elsevier, vol. 43(3-4), pages 513-523, November.
    10. Vogelsang, Timothy J., 1997. "Wald-Type Tests for Detecting Breaks in the Trend Function of a Dynamic Time Series," Econometric Theory, Cambridge University Press, vol. 13(06), pages 818-848, December.
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    More about this item

    Keywords

    International Trade; Trade Liberalization; Structural Change; Oil Shocks; Kennedy Round; East Asia; Financial Crisis.;

    JEL classification:

    • C22 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes
    • F1 - International Economics - - Trade
    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations

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