Gravity-Model Estimation with Time-Interval Data: Revisiting the Impact of Free Trade Agreements

Peter Egger, Mario Larch and Yoto Yotov

No 8553, CESifo Working Paper Series from CESifo

Abstract: We challenge the common practice of estimating gravity equations with time-interval data in order to capture dynamic-adjustment effects to trade-policy changes. Instead, we point to a series of advantages of using consecutive-year data recognizing dynamic-adjustment effects. Our analysis reveals that, relative to time-interval data, the proposed approach avoids downward-biased effect estimates due to the distribution of trade-policy events during an event window as well as due to anticipation (pre-interval) and delayed (post-interval) effects, and it improves the efficiency of effect estimates due to the use of more data.

Keywords: structural gravity; trade policy; free trade agreements; interval data (search for similar items in EconPapers)
JEL-codes: F10 F14 (search for similar items in EconPapers)
Date: 2020
New Economics Papers: this item is included in nep-ecm and nep-int
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (23)

Downloads: (external link)
https://www.cesifo.org/DocDL/cesifo1_wp8553.pdf (application/pdf)

Related works:
Working Paper: Gravity-model Estimation with Time-interval Data: Revisiting the Impact of Free Trade Agreements (2020)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:ces:ceswps:_8553

Access Statistics for this paper

More papers in CESifo Working Paper Series from CESifo Contact information at EDIRC.
Bibliographic data for series maintained by Klaus Wohlrabe ().