NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH

The Role of History in Bilateral Trade Flows

Barry Eichengreen, Douglas A. Irwin

NBER Working Paper No. 5565
Issued in May 1996
NBER Program(s):   ITI

This paper investigates the theory and evidence that history plays a role in shaping the direction of international trade. Because there are reasons to anticipate a positive correlation between the predominant direction of trade flows in the past and membership in preferential arrangements in the present, there may be a tendency to spuriously attribute to preferential arrangements the effects of historical factors and to exaggerate the influence of the former. Thus, the standard gravity-model formulation, which neglects the role of historical factors, suffers from omitted-variables bias. We illustrate these points by analyzing the evolution of trade between 1949 and 1964. We find that historical factors exercise an important influence on trade even after controlling for the arguments of the standard gravity model.

download in pdf format
   (1789 K)

email paper

This paper is available as PDF (1789 K) or via email.

Machine-readable bibliographic record - MARC, RIS, BibTeX

Document Object Identifier (DOI): 10.3386/w5565

Published: The Role of History in Bilateral Trade Flows, Barry Eichengreen, Douglas A. Irwin. in The Regionalization of the World Economy, Frankel. 1998

Users who downloaded this paper also downloaded these:
Eichengreen and Irwin The Role of History in Bilateral Trade Flows
Deardorff w5377 Determinants of Bilateral Trade: Does Gravity Work in a Neoclassical World?
Deardorff Determinants of Bilateral Trade: Does Gravity Work in a Neoclassical World?
Frankel and Wei w4335 Emerging Currency Blocs
Bayoumi and Eichengreen w5283 Is Regionalism Simply a Diversion? Evidence From the Evolution of the EC and EFTA
 
Publications
Activities
Meetings
Data
People
About

Support
National Bureau of Economic Research, 1050 Massachusetts Ave., Cambridge, MA 02138; 617-868-3900; email: info@nber.org

Contact Us