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The Effect of GATT/WTO on Export and Import Price Volatility

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  • Vinh T. H. Cao
  • Lisandra Flach

Abstract

type="main" xml:id="twec12228-abs-0001"> Despite much interest and discussion concerning the trade-promoting effects of membership in multilateral trade agreements, little is known about the effect of membership on world trade prices. This paper fills this gap by studying the effects of membership on export and import price volatility. We document a surprisingly strong and robust empirical regularity: GATT/WTO membership reduces the volatility of prices over time for both import and export countries, with similar results found for free trade agreements. We show that results are not driven by sample selection or endogeneity concerns and that the effect is captured by members subject to rigorous accession procedures.

Suggested Citation

  • Vinh T. H. Cao & Lisandra Flach, 2015. "The Effect of GATT/WTO on Export and Import Price Volatility," The World Economy, Wiley Blackwell, vol. 38(12), pages 2049-2079, December.
    • Handle: RePEc:bla:worlde:v:38:y:2015:i:12:p:2049-2079
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    File URL: http://hdl.handle.net/10.1111/twec.2015.38.issue-12
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    Cited by:

    1. Flach, Lisandra & Gräf, Fabian, 2020. "The impact of trade agreements on world export prices," Munich Reprints in Economics 70372, University of Munich, Department of Economics.
    2. Gnangnon, Sèna Kimm, 2023. "Duration of membership in the world trade organization and investment-oriented remittances inflows," The Quarterly Review of Economics and Finance, Elsevier, vol. 88(C), pages 258-277.
    3. Sèna Kimm Gnangnon, 2023. "Effect of the duration of membership in the GATT/WTO on human development in developed and developing countries," Empirica, Springer;Austrian Institute for Economic Research;Austrian Economic Association, vol. 50(4), pages 943-983, November.
    4. Beatriz de Blas & Katheryn N. Russ, 2015. "Understanding Markups in the Open Economy," American Economic Journal: Macroeconomics, American Economic Association, vol. 7(2), pages 157-180, April.
    5. Gnangnon, Sèna Kimm, 2023. "Effect of the duration of membership in the GATT/WTO on economic growth volatility," Structural Change and Economic Dynamics, Elsevier, vol. 65(C), pages 448-467.
    6. Gnangnon, Sèna Kimm, 2022. "Effect of the Duration of Membership in the GATT/WTO on Human Development in Developed and Developing Countries," EconStor Preprints 265061, ZBW - Leibniz Information Centre for Economics.
    7. Lisandra Flach & Fabian Gräf, 2018. "The Impact of Trade Agreements on World Export Prices," CESifo Working Paper Series 7032, CESifo.

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