Trade-diversion effects of free trade agreements (FTAs) have not been thoroughly examined empirically. Using a novel empirical approach, we confirm that FTAs divert trade away from non-member countries and even more so from internal trade (domestic sales) in member countries.

I propose a simple solution to the distance puzzle in international trade. Contrary to existing estimates of persistent or increasing distance effects on trade, I offer robust evidence that the impact of distance on trade has fallen steadily over time.

Does higher income cause democracy? Accounting for the dynamic nature and high persistence of income and democracy, we find a statistically significant positive relation between income and democracy for a postwar period sample of up to 150 countries. Our results are robust across different...

One consequence of tariff evasion is that a country’s average statutory import tariff rate deviates from the average applied tariff rate. We deliver an approach to estimate the average evasion rate in multi-country general equilibrium. We find evidence of significant average tariff evasion...

This paper estimates the impact of time zone differences between trading locations on trade costs and trade in general equilibrium. Using homogeneous bilateral trade data between US states and Canadian provinces, time zone differences are found to reduce bilateral trade by 11% on average, which...