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Are Free Trade Agreements Contagious?

  • Richard Baldwin
  • Dany Jaimovich

This paper presents empirical evidence on the extent to which FTAs are gcontagioush, using empirical techniques inspired by the study of contagion in exchange rate crises. Applying a series of different econometric techniques, it tests the null hypothesis that the signing of an FTA between one nationfs trade partners has no affect on the probability of the nation signing a new FTA. The hypothesis is tested against other political, economical and geographical determinants of the FTA formation previously stated in the literature, finding evidence that the contagion phenomenon is present in different specifications and samples.

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File URL: http://gcoe.ier.hit-u.ac.jp/research/discussion/2008/pdf/gd09-057.pdf
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Paper provided by Institute of Economic Research, Hitotsubashi University in its series Global COE Hi-Stat Discussion Paper Series with number gd09-057.

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Date of creation: Apr 2009
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Handle: RePEc:hst:ghsdps:gd09-057
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  42. repec:spo:wpecon:info:hdl:2441/c8dmi8nm4pdjkuc9g8m2hh491 is not listed on IDEAS
  43. Baldwin, Richard & Rieder, Roland, 2007. "A Test of Endogenous Trade Bloc Formation Theory on EU Data," CEPR Discussion Papers 6389, C.E.P.R. Discussion Papers.
  44. Vincent Vicard, 2006. "Trade, Conflicts, and Political Integration: the Regional Interplays," CESifo Working Paper Series 1839, CESifo Group Munich.
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