National Security and International Trade
Heejoon Kang and
Michele Fratianni ()
No 744, Econometric Society 2004 Far Eastern Meetings from Econometric Society
The September 11, 2001 terrorist attack to the twin towers and ensuing heightened national security measures worldwide, but particularly in the United States, are modeled to be equivalent to a thickening of trade barriers in international trade. By estimating a gravity model with a stochastic frontier technique, an effective trade barrier is quantified by â€œtrade inefficiency,â€ that is by the difference between potential trade and actual trade; this is done both for country pairs and for a given country vis-Ã -vis all of its trading partners. The impact of higher security levels on trade is examined through hypothetical increases in border thickness, for given values of control variables
Keywords: Gravity model; political relations; stochastic frontier estimation; trade barriers (search for similar items in EconPapers)
JEL-codes: F13 F02 C33 (search for similar items in EconPapers)
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Persistent link: https://EconPapers.repec.org/RePEc:ecm:feam04:744
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