We examine a standard, gravity model of international commerce, augmented to include political as well as institutional influences on bilateral trade. Using annual data from 1980-2001, we estimate regression coefficients and residual dependencies using a hierarchy of models in each year. Rather than gauge the generalizability of these patterns via traditional measures of statistical significanc...

Anthropological evidence suggests that the human species has evolved what could be called a “trading instinct” over many of years of Darwinian adaptation, where trade acts as a social catalyst and thus as a suppressor of violent conflict among trading groups. Without enough natural human interaction it is unlikely that the trading instinct will achieve its social purposes, even though it may ac...

The rise of Western Europe after 1500 is due largely to growth in countries with access to the Atlantic Ocean and with substantial trade with the New World, Africa, and Asia via the Atlantic. This trade and the associated colonialism affected Europe not only directly, but also indirectly by inducing institutional change. Where “initial” political institutions (those established before 1500) pla...

The demand for wildlife products drives an illegal trade estimated to be worth up to $10 billion per year, ranking it amongst the top transnational crimes in terms of value. Orchids are one of the best-selling plants in the legal horticultural trade but are also traded illegally and make up 70% of all species listed by the Convention on the International Trade in Endangered Species (CITES). To ...

This paper examines various implications of Preferential Trade Agreements (PTAs), namely Customs Unions (CUs) and Free Trade Areas (FTAs), in the context of a multi-country general equilibrium model based on comparative advantage considerations. We calibrate the model to represent countries with symmetric endowments, and compare the impact of those agreements with free trade and a non-cooperati...

The empirical “gravity” equation is extremely successful in explaining bilateral trade. This paper shows how a multi-country model of specialization and costly trade (i.e. a microfounded gravity model) can be applied to explain empirical exchange rate puzzles. One such puzzle is the fact that nominal exchange rates are enormously volatile, but that this volatility does not appear to affect infl...

Measures to actively facilitate trade are increasingly seen as essential to assist developing countries in expanding trade and benefiting from globalisation. Although often viewed as narrowly concerned with the ease and speed of Customs procedures, even greater trade cost reductions and trade and welfare benefits may be reaped from a broader view of trade facilitation (TF) that incorporates tra...

In recent years, there has been an increasing interest in currency :union:s internationally. The formation of currency :union: in Organization of Islamic Cooperation (OIC) has drawn much attention of Islamic countries. This paper aims to investigate the effect of currency :union: formation for trade among 49 Islamic countries over the period 1990-2012 by OCA and Augmented Gravity Model (AGM). T...

Introduction: Over the past fifteen years, there has been a dramatic rise in the number and range of regional or preferential trade agreements (PTAs). 1 There is evidence to suggest that market driven regional trading blocs are emerging in the European neighbourhood, the Americas and East Asia. The US is actively pursuing FTA in the Americas and East and South-East Asia. The European Union (EU)...