Suchergebnisse

The proposed Transatlantic Trade and Investment Partnership (TTIP) is the most significant trade policy initiative since the Uruguay Round (1986 to 1994). It would create a free trade zone covering 45% of world GDP. However, critics dismiss the possible welfare gains as small compared to the risks. In this paper, we provide results based on a structurally estimated general equilibrium trade model. Assuming that the TTIP will reduce transatlantic trade costs by as much as existing bilateral agreements have reduced trade costs between their trade partners, we find that a TTIP could result in very substantial gains for Germany (+3.5%), Europe (3.9%), and the world (+1.6%), but that it could also harm third countries.

We challenge the common practice of estimating gravity equations with interval or averaged data in order to capture dynamic‐adjustment effects to trade‐policy changes. Instead, we point to a series of advantages of using consecutive‐year data recognizing dynamic‐adjustment effects. Our analysis reveals that, relative to interval or averaged data, the use of consecutive‐year data avoids downward‐biased effect estimates due to the distribution of trade‐policy events during an event window as well as due to anticipation (pre‐interval) and delayed (post‐interval) effects, and it improves the efficiency of effect estimates due to the use of more data.

This paper proposes a simple and flexible econometric approach to quantify ex-ante the "deep" impact of trade liberalization and the "hard" effects of protection with the empirical structural gravity model. Specifically, the paper argues that the difference between the estimates of border indicator variables for affected and non-affected countries can be used as a comprehensive measure of the change in bilateral trade costs in response to a hypothetical policy change. To demonstrate the effectiveness of these methods, the paper focus on the integration between the countries from the Central European Free Trade Agreement (CEFTA) and the European Union (EU), which is an important policy application that has not been studied before due to lack of data. This analysis overcomes this challenge by utilizing a new dataset on trade and production that covers all EU countries and all CEFTA members (except for Kosovo). The partial equilibrium estimates that we obtain confirm the validity of our methods, while the corresponding general equilibrium effects point to significant and heterogeneous potential gains for the CEFTA countries from joining the EU. The proposed methods can also be extended to ex-post analysis and are readily applicable to other applications, for example, "hard" Brexit.

Abstract
We build and estimate a structural model of transitional growth and trade in a many-country world. The gravity model of trade is combined with a capital accumulation mechanism driving transition between steady states. Trade affects growth through changes in consumer and producer prices. Simultaneously, capital accumulation affects trade directly through changes in country size and indirectly through changes in the incidence of trade costs. Theory maps to an econometric system that identifies the parameters of the model and establishes causal links between trade, capital accumulation and income. Counterfactual trade liberalisation magnifies static gains by a dynamic path multiplier of 1.8.