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Terms of Trade and Global Efficiency Effects of Free Trade Agreements, 1990-2002

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  • Anderson, James

    (Department of Economics Boston College)

  • Yotov, Yoto

    (Department of Economics Drexel University)

Abstract

This paper infers the terms of trade effects of the Free Trade Agreements (FTAs) of the 1990s. Using panel data methods to resolve two way causality between trade and FTAs, we estimate large FTA effects on bilateral trade volume in digit manufacturing goods from 1990-2002. We deduce the terms of trade changes implied by these volume effects for 40 countries plus a rest-of-the-world aggregate using the structural gravity model. Some countries gain over 10%, some lose less than 0.2%. Overall, using a novel measure of the change in iceberg melting,global efficiency rises 0.62%

Suggested Citation

  • Anderson, James & Yotov, Yoto, 2012. "Terms of Trade and Global Efficiency Effects of Free Trade Agreements, 1990-2002," School of Economics Working Paper Series 2012-3, LeBow College of Business, Drexel University.
    • Handle: RePEc:ris:drxlwp:2012_003
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    More about this item

    Keywords

    Free Trade Agreements; Gravity; Terms of Trade; Coefficient of Resource Utilization;
    All these keywords.

    JEL classification:

    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • F16 - International Economics - - Trade - - - Trade and Labor Market Interactions

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