Are Free Trade Agreements Contagious?
NBER Working Paper No. 16084
This paper presents a new model of the domino effect which is used to generate an empirical index of how “contagious” FTAs are with respect to third nations. We test our contagion hypothesis together with alternative specifications of interdependence and other political, economical and geographical determinants of FTA formation. Our main finding is that contagion is present in our data and is robust to various econometric specifications and samples.
Published: “Are Free Trade Agreements Contagious?”, with Dany Jaimovich, Journal of International Economics, Volume 88, Issue 1, September 2012, Pages 1–16.