We show that the countries of the former Austro-Hungarian monarchy trade significantly more with one another in the aftermath of the collapse of the Iron Curtain than predicted by a standard gravity model. This trade surplus declines linearly and monotonically over time. We argue that these...

The European Neighbourhood Policy (ENP) set an additional objective for the Southern Mediterranean Countries (SMCs): the prospect of 'a stake in the internal market'. The launch of this new policy has been the occasion for a revival of empirical studies aimed at assessing the impact of the...

Microfoundations of the euro´s effect on euro area trade hinge on the timing, thespeed and the size of adjustment in trade costs. We estimate timing, speed and sizeof adjustment in trade costs for sectoral trade data. Our approach allows for sectorspecific impacts of trade costs on sectoral...

This paper analyses trade specialisation dynamics in two Eastern European countries(Romania and Bulgaria – EEC-2) vis-à-vis the core EU member states (EU-15) over theperiod 1990-2006. Specifically, we focus on whether there is a shift towards intra-industrytrade leading to economic...

This paper analyses currency options for six Pacific states - Fiji, Papua New Guinea, Samoa, Solomon Islands, Tonga and Vanuatu - that issue their own currencies. Empirical estimates indicate that these states already stabilize their currencies against the US dollar because of their large and...

Economic integration between the EU and the CEECs has proceeded at high speed over the 90's, with the main channels of such integration being trade and FDI. Some authors believe that the `commercial transition?is now complete and that a new, deeper phase of integration has started, with growing...

The gravity model of trade is utilized to assess the impact of disintegration on trade. The analysis is based on three recent disintegration episodes involving the firmer Soviet Union, Yugoslavia and Czechoslovakia. The results point to a very strong home bias around the time of disintegration,...

This paper introduces a market size dependent firm entry cost into the Melitz (2003) model. This is a relatively small generalisation, which preserves the analytical solvability of the model. Nevertheless, our model yields several new results that are in line with data. First, the average...