Does trade cause growth?

Article Abstract:

The impact of international trade on income is investigated by using the countries's geographic characteristics to construct instrumental variables estimates of such impact. Results show that geographic variables provide only a limited information about the relationship between trade and income and cannot be applied without considering the effects of trade policies. Nonetheless, point estimates suggest that effect of geography-based differences on trade are quantitatively large and larger that those obtained by ordinary least-squares estimates.

Analysis, Economic aspects, Cost and standard of living, Cost of living, Income

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Measuring international capital mobility: a review

Article Abstract:

The popular definitions of perfect capital mobility include the Feldstein-Horioka condition, real interest parity, uncovered interest parity and covered interest parity. Many countries have removed barriers to the international movement of capital. Covered interest differentials are small due to the elimination of the country premium. The currency premium still exists because variability in real and nominal exchange rates continues to occur.

International aspects, Interest rates, International finance, Capital movements

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Regional trading arrangements: natural or supernatural?

Article Abstract:

The advantages and disadvantages of regional trading arrangements (RTAs) are examined to determine their desirability for trading partners. The monopolistic competition model of trade and the gravity model are used to explain the role of variables, such as transportation costs, gross national product and the distance between trading partners. Results show the indirect effect of transport costs on the desirability of RTAs.

Commercial treaties, Trade agreements

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