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American Economic Journal: Economic Policy: Vol. 3 No. 3 (August 2011)
AEJ: Policy Volume. 3, Issue 3 | 
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AEJ: Policy Forthcoming Articles
The Trade Effects of Endogenous Preferential Trade Agreements
Article Citation
Egger, Peter,
Mario Larch,
Kevin E. Staub, and
Rainer Winkelmann. 2011. "The Trade Effects of Endogenous Preferential Trade Agreements."
American Economic Journal: Economic Policy,
3(3): 113-43.
DOI: 10.1257/pol.3.3.113
DOI: 10.1257/pol.3.3.113
Abstract
Structural new trade theory models have never been used to evaluate and quantify the role of preferential trade agreement (PTA) membership for trade in a way which is consistent with general equilibrium. Apart from filling this gap, the present paper aims at delivering an empirical model which takes into account both that PTA membership is endogenous and that the world matrix of bilateral trade flows
contains numerous zero entries. These features are treated in an encompassing way by means of (possibly two-part) Poisson pseudomaximum likelihood estimation with endogenous binary indicator variables in the empirical model. (JEL F11, F13, F15)
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Authors
Egger, Peter (ETH Zurich and U Nottingham)
Larch, Mario (U Bayreuth and CESifo, Munich)
Staub, Kevin E. (U Zurich)
Winkelmann, Rainer (U Zurich and CESifo, Munich)
Larch, Mario (U Bayreuth and CESifo, Munich)
Staub, Kevin E. (U Zurich)
Winkelmann, Rainer (U Zurich and CESifo, Munich)
JEL Classifications
F11: Neoclassical Models of Trade
F13: Trade Policy; International Trade Organizations
F15: Economic Integration
F13: Trade Policy; International Trade Organizations
F15: Economic Integration
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