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Disintegration and Trade

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  • Jarko Fidrmuc
  • Jan Fidrmuc

Abstract

The gravity model of trade is utilized to assess the impact of disintegration on trade. The analysis is based on three recent disintegration episodes involving the former Soviet Union, Yugoslavia and Czechoslovakia. The results point to a very strong home bias around the time of disintegration, with intra-union trade exceeding normal trade approximately 43 times in the former Soviet Union and Czechoslovakia, and 24 times in the former Yugoslavia. Disintegration was followed by a sharp fall in trade intensity. Nevertheless, there is a considerable hysteresis in economic relations, with trade flows among the former constituent Republics still between two and 30 times greater than normal trade in 1998.

Suggested Citation

  • Jarko Fidrmuc & Jan Fidrmuc, 2000. "Disintegration and Trade," William Davidson Institute Working Papers Series 353, William Davidson Institute at the University of Michigan.
    • Handle: RePEc:wdi:papers:2000-353
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    More about this item

    Keywords

    Gravity model; international trade; disintigration;
    All these keywords.

    JEL classification:

    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
    • F15 - International Economics - - Trade - - - Economic Integration
    • F41 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Open Economy Macroeconomics

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