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Trade Volatility and the GATT/WTO: Does Membership Make a Difference?

Author

Listed:
  • Chowdhury, Abdur

    (Department of Economics Marquette University)

  • Xuepeng, Liu

    (Kennesaw State University)

  • Wang, Miao

    (Department of Economics Marquette University)

  • Wong, M. C. Sunny

    (University of San Francisco)

Abstract

The Bitcoin phenomenon, and the technological innovation that made it possible, is interesting - but for investors large and small, the more pertinent question is whether they should buy the virtual currency or avoid it. We analyze a Bitcoin investment from the standpoint of a U.S. investor with a diversified portfolio. Bitcoin investment shows high average return as well as volatility. Mean-variance Spanning tests show that Bitcoin investment offers significant diversification benefits. Well diversified portfolios with a small Bitcoin component (2%) shows small improvement in the risk-return trade-off.

Suggested Citation

  • Chowdhury, Abdur & Xuepeng, Liu & Wang, Miao & Wong, M. C. Sunny, 2014. "Trade Volatility and the GATT/WTO: Does Membership Make a Difference?," Working Papers and Research 2014-02, Marquette University, Center for Global and Economic Studies and Department of Economics.
    • Handle: RePEc:mrq:wpaper:2014-02
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    File URL: http://epublications.marquette.edu/econ_workingpapers/34
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    More about this item

    Keywords

    trade volatility; WTO; gravity model;
    All these keywords.

    JEL classification:

    • F02 - International Economics - - General - - - International Economic Order and Integration
    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
    • F14 - International Economics - - Trade - - - Empirical Studies of Trade

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