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Regionalization and home bias: the case of Canada

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  • Janet Ceglowski

Abstract

The bilateral trade flows between Canada and the U.S. are the world's largest and have grown rapidly in the 1990s. Are they evidence of a North American trading bloc? A gravity model of trade finds that while economic size and proximity can explain much of the substantial trade between Canada and the U.S., Canada's merchandise trade exhibits a significant U.S. bias. The model also reveals that trade between Canada's provinces is 31 times that between a province and a country other than the U.S., significantly higher than estimates of Canada's home bias relative to the U.S.

Suggested Citation

  • Janet Ceglowski, 1998. "Regionalization and home bias: the case of Canada," Working Papers 98-16, Federal Reserve Bank of Philadelphia.
    • Handle: RePEc:fip:fedpwp:98-16
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    Keywords

    Canada; International trade;

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