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Regionalism as a Building Block for Multilateralism

Title data

Herz, Bernhard ; Wagner, Marco:
Regionalism as a Building Block for Multilateralism.
In: Global Economy Journal. Vol. 11 (2011) Issue 1 . - pp. 1-23.
ISSN 1524-5861
DOI: https://doi.org/10.2202/1524-5861.1676

Official URL: Volltext

Abstract in another language

The well-known question whether regional trade agreements (RTAs) and the multilateral trading system (MTS) are “strangers, friends, or foes” (Bhagwati and Panagariya, 1996) has gained new importance with the widespread proliferation of RTAs in recent years. Based on an extensive data set which covers most of world trade over the past 60 years and about 240 regional trade agreements, we analyze the relationship between RTAs and the MTS by combining the gravity model framework with vector auto-regression analysis. Impulse-response-functions robustly suggest that multilateral trade liberalization responds in a significantly positive way to regional trade liberalization. We also find robust evidence that RTA liberalization Granger-causes GATT/WTO liberalization. Thus, our results indicate that RTAs do not undermine the MTS but serve as building blocks to multilateral trade liberalization.

Further data

Item Type: Article in a journal
Refereed: Yes
Keywords: regionalism; multilateralism; trade agreement; gravity model
Institutions of the University: Faculties > Faculty of Law, Business and Economics > Department of Economics > Chair Economics I > Chair Economics I - Univ.-Prof. Dr. Bernhard Herz
Faculties
Faculties > Faculty of Law, Business and Economics
Faculties > Faculty of Law, Business and Economics > Department of Economics
Faculties > Faculty of Law, Business and Economics > Department of Economics > Chair Economics I
Result of work at the UBT: Yes
DDC Subjects: 300 Social sciences > 330 Economics
Date Deposited: 31 Mar 2015 08:22
Last Modified: 31 Mar 2015 08:22
URI: https://eref.uni-bayreuth.de/id/eprint/9529