Working Paper: NBER ID: w10207
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 data set 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 data set. There is little evidence that membership in the GATT/WTO has a significant dampening effect on trade volatility.
Keywords: WTO; trade stability; GATT; trade flows
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) | decreased trade volatility (F19) |
| GATT/WTO membership (F13) | trade volatility for exporters (F10) |
| GATT/WTO membership (F13) | trade volatility for importers (F10) |
| trade volatility for exporters (F10) | trade volatility does not differ markedly between members and non-members (F14) |
| trade volatility for importers (F10) | trade volatility does not differ markedly between members and non-members (F14) |