Working Paper: CEPR ID: DP4246
Authors: Andrew K. Rose
Abstract: I examine the hypothesis that membership in the World Trade Organization (WTO) and its predecessor the General Agreement on Tariffs and Trade (GATT) has increased the stability and predictability of trade flows. I use a large dataset covering annual bilateral trade flows between over 175 countries between 1950 and 1999, and estimate the effect of GATT/WTO membership on the coefficient of variation in trade computed over 25- year samples, controlling for a number of factors. I also use a comparable multilateral dataset. There is little evidence that membership in the GATT/WTO has a significant dampening effect on trade volatility.
Keywords: bilateral; coefficient; data; empirical; flow; international; panel; variation; volatility
JEL Codes: F13
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| GATT/WTO membership (F13) | trade volatility (F14) |
| GATT/WTO membership (exporters) (F13) | trade volatility (less volatile) (F19) |
| GATT/WTO membership (importers) (F13) | trade volatility (more volatile) (F14) |
| trade volatility (exporters) (F14) | coefficient of variation (C46) |
| trade volatility (importers) (F10) | coefficient of variation (C46) |