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Starting with Tinbergen (1962, Shaping the world economy: Suggestions for an international economic policy, The Twentieth Century Fund), quantifying the effects of regional trade agreements (RTAs) on international trade flows has always been among the most popular topics in the trade literature. Also not surprisingly, to estimate the effects of RTAs, most researchers and policy analysts have relied on the workhorse model of trade— the gravity equation. Over the past 60years, there have been many important developments in the RTA literature, both in terms of better methods to quantify their effects, and in terms of more and higher quality data. The objective of this paper is to trace the evolution of the methods and data developments in the RTA literature, from Tinbergen's very first exploration until today, and to critically evaluate their significance for our ability to measure the impact of RTAs (and other policies) on international trade. [ABSTRACT FROM AUTHOR]

This paper evaluates the effects of sanctions on Russia between 2014 and 2019 and the resulting countersanctions. We estimate their impact on trade in a gravity framework, allowing for treatment heterogeneity among pairs and sectors, and use the estimated elasticities in a general equilibrium analysis. We find that the sanctions decreased trade with Russia in key sectors, translating to a loss in real income in Russia by 0.3%. Full decoupling of the EU and its allies from Russia would increase this effect to over 4%. Our results emphasize the role of deep sanctions as a foreign policy instrument and international cooperation. [ABSTRACT FROM AUTHOR]

We quantify the impact of country-specific institutions on international trade and development in a structural gravity framework. The econometric analysis offers robust evidence that stronger institutions promote trade. A counterfactual analysis reveals that the changes in institutional quality in the poor countries in our sample between 1996 and 2006 have had, via their impact on imports from rich countries, significant and heterogeneous welfare effects, varying between −2% and 5%. Our approach is readily applicable to identifying the impact of any country-specific variable on international trade in the structural gravity framework. [ABSTRACT FROM AUTHOR]

Preferential trade agreements (PTAs) have proliferated over the past 60 years. While a small number of recent studies have examined empirically the economic determinants of the likelihood of a pair of countries having a PTA, this study explains empirically the timing of all PTA formations and enlargements from 1950 through 2006 using duration analysis. Our main and novel goal is to predict (in- and out-of-sample) a substantive share of these 1,560 PTA events using a parsimonious model with mainly economic variables, taking selection dynamics into account. Our analysis reveals that we can predict correctly in-sample the actual year of entry into force for 26% of the 1,560 bilateral PTA formations/enlargements in the period 1950-2006 among 10,518 pairings of 146 countries using only a few economic and political variables. Moreover, we can predict correctly in-sample 57% of these PTA events within a 10-year window leading up to the event using this model. The model also performs well out-of-sample for the near term (82%), but not if the out-of-sample period is very long. We conclude with an evaluation of the model's ability to predict the timing of the North American Free Trade Agreement, the European Union's formation and enlargements, and the model's ten most likely post-2006 PTA events. (JEL F14, F15), I. INTRODUCTION One of the most notable economic events since World War II is the proliferation of preferential trade agreements (PTAs), including free trade agreements (FTAs) and customs unions (CUs). [...]