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The GATT/WTO Welfare Effects: 1950-2015

Author

Listed:
  • Chang, Pao-Li

    (Singapore Management University)

  • Jin, Wei

    (Nankai University)

  • Yao, Kefang

    (Hunan University)

Abstract

This paper evaluates the welfare effects of GATT/WTO-induced reductions in tariffs, variable and fixed trade costs, based on identified direct effects of membership indicators on trade flows via nonparametric matching estimations. The identification does not require the use of tariff data, which permits a comprehensive evaluation of the welfare impact of GATT/WTO for a long panel since its inception (1950–2015) of as many as 180 economies. The results indicate substantial (but highly dispersed) welfare gains across members of different development stages and increasing welfare losses of nonmembers in later decades by staying outside the system. An extensive set of robustness checks with respect to model specifications, parameter values, and matching estimations are provided. We also characterize the effects of GATT/WTO on cross-country income disparity, its complementarity with preferential trade agreements, and the welfare impacts of China’s WTO entry on the other economies.

Suggested Citation

  • Chang, Pao-Li & Jin, Wei & Yao, Kefang, 2022. "The GATT/WTO Welfare Effects: 1950-2015," Economics and Statistics Working Papers 4-2022, Singapore Management University, School of Economics.
    • Handle: RePEc:ris:smuesw:2022_004
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    More about this item

    Keywords

    matching estimation; quantitative analysis; welfare; fi rm entry; income disparity;
    All these keywords.

    JEL classification:

    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • F17 - International Economics - - Trade - - - Trade Forecasting and Simulation

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