The relationship between India and ASEAN has emerged as a crucial basis of their foreign policy. Both the regions signed a Free Trade Agreement in 2009, which came into effect in 2010. They are now reviewing the FTA to further enhance their economic cooperation. At this critical juncture, this...

We propose a new market design for trading financial assets. The design combines three elements: (1) Orders are downward-sloping linear demand curves with quantities expressed as flows; (2) Markets clear in discrete time using uniform-price batch auctions; (3) Traders may submit orders for...

On the eve of its 60th anniversary, the gravity model of trade is a "celebrity", due to its intuitive appeal, solid theoretical foundations, and remarkable empirical success. Yet, many economists still view gravity simply as an intuitive but naive reduced-form estimating equation and apply it...

This paper presents two empirical tools to quantify the impacts of tariff changes on bilateral trade and welfare. Both tools are rooted in the structural gravity literature. The first tool estimates the impact of tariff changes on bilateral trade for 5,020 products in a partial equilibrium...

Global value chains (GVCs) have shaped the dynamics of globalisation in recent years. This paper reviews key concepts and tools to measure countries’ involvement in GVCs, explores recent trends and investigates the underlying drivers of GVC participation empirically. The analysis in the paper...

This paper explores the economic impacts of preferential trade agreements, conditional on their level of ambition. We cluster 278 agreements, encompassing 910 provisions over 18 policy areas and estimate the trade elasticity for the different clusters. We then use these elasticities in a series...

Illicit financial flows have recently attracted the attention of academia, practitioners, and multilateral organizations who consider them harmful to economic development. Some observers suggest that many of these flows occur via the misinvoicing of international trade transactions. This study...

In this paper I apply the gravity model to analyse structural changes of Lithuania's export during the first pandemic year. Lithuania was selected as a case of a small open economy with relatively high numbers of Covid-19 cases, on one hand, and a rather small decrease of its GDP growth in 2020,...

This paper examines the countercyclicality of remittance inflows to the countries in Asia and the Pacific. It also aims to identify major determinants of remittances using gravity models of bilateral remittances. We find that bilateral remittance inflows are countercyclical against the business...

The objective of this paper is an ex-post evaluation of the European Union-Southern African Development Community Economic Partnership Agreement (EU-SADC EPA) stemming from changes in trade flows from the six members of the SADC (Botswana, Eswatini, Lesotho, Mozambique, Namibia, and South...

In recent years, young brain drain within Italian provinces has increased at higher speed than ever. While is premature to assess whether this process is transitory or permanent, it should be analysed and monitored by researchers and policy makers for its many socio-economic consequences....

The conventional immigration and trade literature regards immigrants as mediators for informal barriers such as institutional and cultural differences. However, this notion neglects network effects stemming from short visits. This paper investigates the ways in which international student...

This study analyzes whether ongoing liberalization has resulted in more profound trade expansion for Indonesia versus regional partner countries. A gravity model is first employed to find whether regional trade agreements resulted in more significant intra-regional exports or diverted trade....

Activists denouncing firms for what they consider unethical conduct (e.g., poor treatment of labor or practices that are harmful to the environment) often pressure firms through consumer boycotts. This paper presents a model of international trade with heterogeneous firms and endogenous...

We derive a novel estimation approach to quantify three-party relocation effects in a dyadic framework. Applied to the effects of civil conflicts on trade, we find robust evidence that importers substitute away from exporters that are engaged in conflict. This trade relocation persists after the...

The European Union (EU) supports developing countries with a unilateral trade preference scheme. The scheme underwent a major reform in 2014, in which many countries lost access to reduced tariff rates. We analyse how this radical step that removed preferences from 103 countries by 2018 fits...

We develop and estimate a theory-consistent gravity model for interregional migration flows in the presence of unemployment. Micro-founded in a setting where search friction regulates labor market transitions, we derive a migration gravity equation for bilateral mobility that embodies a...

We propose a Generalized Poisson-Pseudo Maximum Likelihood (G-PPML) estimator that relaxes the PPML estimator's assumption that the dependent variable's conditional variance is proportional to its conditional mean. Instead, we employ an iterated Generalized Method of Moments (iGMM) to estimate...

While it is well-recognized that there are differences in the trade values reported by exporters and importers, a literature has emerged linking this trade gap to tariff evasion. These efforts, however, lack a structural theoretic underpinning and limit their product-level investigations to a...

We propose a simple and flexible reduced-form econometric approach to estimate gravity models in the short and the long run. The theoretical lens for interpreting our methods amends the canonical Lucas-Prescott adjustment formulation to allow for time-interval-varying...

We examine the pattern of allowance trades in the European Union Emissions Trading System (EU ETS) using highly disaggregated trading data and identify a significant and robust home market bias. Our results point to informational transactions costs that increase when trading across national...

In this paper, we study the effect of gamma positioning of dynamic hedgers on market quality through simulations. We find that increases in the net gamma positioning of dynamic hedgers reduces volatility and increases market stability, whereas a negative gamma positioning increases volatility...

In this paper, we study the effect of gamma positioning of dynamic hedgers on market quality through simulations. We find that increases in the net gamma positioning of dynamic hedgers reduces volatility and increases market stability, whereas a negative gamma positioning increases volatility...

Purpose This study proposes spatial origin-destination threshold Tobit to address spatial interdependence among bilateral trade flows while accounting for zero trade volumes. Design/methodology/approach This model is designed to capture multiple forms of spatial autocorrelation embedded in...

This study estimates international and interprovincial migrants' impact on interprovincial trade using panel data from 1981- 2016 for Canadian provinces. Estimated results show that migration plays a significant role in determining Canadian interprovincial trade. Although the stock of...

The EU's Emission Trading Scheme (EU ETS) has been shown to have reduced emissions in the participating countries and industries since its adoption in 2005. However, there is less evidence on the shifting of production outside EU to avoid emission controls. We study this so-called carbon leakage...

This study uses the gravity model to estimate the effects of food safety regulations implemented by the partner countries on agri-food exports of China. Annual bilateral trade data are compiled for major agrifood export items of China like apples, kidney beans, garlic, mandarins and orange, meat...