Nafta´s trade efects: new evidence with a gravity model

Claudio Montenegro and Isidro Soloaga

Estudios de Economia, 2006, vol. 33, issue 1 Year 2006, 45-63

Abstract: This paper estimates econometrically the impact of NAFTA on US-Mexico and US-third countries (groups of countries) trade flows. Using a traditional gravity-equation framework, we try to see to what extent the bilateral trade flows between the US and different countries differ from a gravity-type specification. By incorporating a series of dummy variables into the specification, we interpret the changes in these dummy variables over time as evidence on whether NAFTA affected the trade patterns. The main conclusion is that NAFTA did not have a significant effect on US trade patterns, neither with Mexico nor with other countries in the world (with exception of CACM).

Keywords: NAFTA; Gravity Model; Trade Diversion; Fixed Effects. (search for similar items in EconPapers)
JEL-codes: F10 F13 F15 (search for similar items in EconPapers)
Date: 2006
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Citations: View citations in EconPapers (7)

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Persistent link: https://EconPapers.repec.org/RePEc:udc:esteco:v:33:y:2006:i:1:p:45-63

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