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

  • Anderson, James

    ()

    (Department of Economics Boston College)

  • Yotov, Yoto

    ()

    (Department of Economics Drexel University)

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%

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File URL: http://dl.dropboxusercontent.com/u/162210677/RePEc/drx/wpaper/LeBow%20College%20of%20Business%20Working%20Paper%202012-3.pdf
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Paper provided by LeBow College of Business, Drexel University in its series School of Economics Working Paper Series with number 2012-3.

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Length: 50 pages
Date of creation: 30 Apr 2012
Date of revision:
Handle: RePEc:ris:drxlwp:2012_003
Contact details of provider: Web page: http://www.lebow.drexel.edu/

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