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Revisiting the 'Cobden-Chevalier network' trade and welfare effects

Jacopo Timini

No 2122, Working Papers from Banco de España

Abstract: This study revisits the trade and welfare effects of 19th century bilateralism exploiting the latest developments in structural gravity models, including the consideration of domestic trade. Using bilateral trade data between 1855 and 1875, I show that the Cobden-Chevalier network, i.e. a system of bilateral trade agreements including the Most Favored Nation clause, had large, positive and significant effects on members’ trade. These, however, were heterogeneous at the treaty-level. I then calculate its general equilibrium effects on total trade and welfare. They are considerable, while trade diversion effects are negligible. These results reshape the understanding of the Cobden-Chevalier network, helping in further rationalizing the “free trade epidemic” of the 1860s and 1870s.

Keywords: international trade; trade agreements; MFN; Cobden-Chevalier; structural gravity models (search for similar items in EconPapers)
JEL-codes: F13 F14 F15 N30 N70 (search for similar items in EconPapers)
Pages: 31 pages
Date: 2021-05
New Economics Papers: this item is included in nep-his and nep-int
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