Transaction costs are a major reason why international trade flows are much smaller than traditional trade theory would … suggest. Trust between trading partners lowers transaction costs and may therefore enhance trade. The empirical analysis of … this paper shows that more trust leads to more trade so that part of the mystery of missing trade can be attributed to the …

We construct a dynamic theory of civil conflict hinging on inter-ethnic trust and trade. The model economy is … inhabitated by two ethnic groups. Inter-ethnic trade requires imperfectly observed bilateral investments and one group has to form … beliefs on the average propensity to trade of the other group. Since confict disrupts trade, the onset of a conflict signals …

disaggregated bilateral trade flows around the globe. We categorise goods into three groups: fragmented, primary and other. The … how exogenous variation in countries trade patterns influences the quality of institutions. Our regressions show that … trade flows generated by fragmented and other processes of production improve rule of law, while trade flows generated by …

Existing literature repeatedly documented a strong correlation between trade and growth. It has also shown a causal … also because of potential second best world effects and the implied endogeneity of trade policy. Policy recommendations for …

Several empirical papers have shown that international trade has a positive causal effect on a country's GDP or growth … rate. A common conclusion from these results is that a free trade policy will increase a country's GDP. This comment does …