Distance(s) and the Volatility of International Trade(s)

Arnaud Mehl, Martin Schmitz and Cédric Tille

No 05-2019, IHEID Working Papers from Economics Section, The Graduate Institute of International Studies

Abstract: We show that distance matters for the volatility of international trade and finance beyond its well-known relevance for their level. A model of trade with endogenous markups shows that the effect of distance on the sensitivity of trade to demand shocks depends on the specific nature of entry and production costs. An empirical assessment using several measures of trade and financial transactions shows that they are more volatile for more distant country pairs. This pattern is observed for several forms of distance.

Keywords: distance; gravity; volatility; international trade; international finance; Great Trade Collapse; Covid-19 pandemic (search for similar items in EconPapers)
JEL-codes: F10 F30 (search for similar items in EconPapers)
Pages: 66 pages
Date: 2019-03-27, Revised 2020-09-07
New Economics Papers: this item is included in nep-int
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Citations: View citations in EconPapers (1)

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Related works:
Journal Article: Distance(s) and the volatility of international trade(s) (2024)
Working Paper: Distance(s) and the Volatility of International Trade(s) (2019)
Working Paper: Distance(s) and the volatility of international trade(s) (2019)
Working Paper: Distance(s) and the volatility of international trade(s) (2019)
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Persistent link: https://EconPapers.repec.org/RePEc:gii:giihei:heidwp05-2019

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