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On the Heterogenous Trade and Welfare Effects of GATT/WTO Membership

Author

Listed:
  • Gabriel Felbermayr
  • Mario Larch
  • Erdal Yalcin
  • Yoto V. Yotov

Abstract

We quantify the partial and general equilibrium effects of GATT/WTO membership on trade and welfare. Using an extensive database covering manufacturing trade for 186 countries over the period 1980-2016, we find that the average impact of GATT/WTO membership on trade among member counties is large, positive, and significant. We contribute to the literature by estimating country-specific estimates and find them to vary widely across the countries in our sample with poorer members benefitting more. Using these estimates, we simulate the general equilibrium effects of GATT/WTO on welfare, which are sizable and heterogeneous across members, and relatively small for non-member countries. We show that countries not experiencing positive trade effects from joining GATT/WTO can still gain in terms of welfare, due to lower import prices and higher export demand.

Suggested Citation

  • Gabriel Felbermayr & Mario Larch & Erdal Yalcin & Yoto V. Yotov, 2022. "On the Heterogenous Trade and Welfare Effects of GATT/WTO Membership," FIW Working Paper series 195, FIW.
    • Handle: RePEc:wsr:wpaper:y:2022:i:195
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    References listed on IDEAS

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    3. Timini, Jacopo, 2023. "Revisiting the ‘Cobden-Chevalier network’ trade and welfare effects," Explorations in Economic History, Elsevier, vol. 89(C).

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    More about this item

    Keywords

    GATT; WTO; Heterogenous Policy Effects; Welfare;
    All these keywords.

    JEL classification:

    • F1 - International Economics - - Trade
    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
    • F14 - International Economics - - Trade - - - Empirical Studies of Trade

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