A Dissection of Trading Capital: Cultural persistence of trade in the aftermath of the fall of the Iron Curtain

Matthias Beestermöller and Ferdinand Rauch

Discussion Papers in Economics from University of Munich, Department of Economics

Abstract: We show that the countries of the former Austro-Hungarian monarchy trade significantly more with one another in the aftermath of the collapse of the Iron Curtain than predicted by a standard gravity model. This trade surplus declines linearly and monotonically over time. We argue that these findings suggest that decaying cultural forces explain a significant part of trading capital. We document the rate of decay of these cultural forces.

Keywords: Trade; Gravity; Culture; Borders; Habsburg Empire; Persistence (search for similar items in EconPapers)
JEL-codes: F14 F15 N33 N34 N94 (search for similar items in EconPapers)
Date: 2014-09-11
New Economics Papers: this item is included in nep-gro, nep-his and nep-int
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Citations: View citations in EconPapers (7)

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Related works:
Working Paper: A Dissection of Trading Capital: Cultural persistence of trade in the aftermath of the fall of the Iron Curtain (2014)
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Persistent link: https://EconPapers.repec.org/RePEc:lmu:muenec:21688

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