Disintegration and Trade

Center for European Integration Studies (ZEI) Working Paper No. B24-2001

34 Pages Posted: 9 Jan 2002  

Jarko Fidrmuc

Zeppelin University Friedrichshafen

Jan Fidrmuc

Brunel University - Department of Economics and Finance; Centre for Economic Policy Research (CEPR); University of Michigan at Ann Arbor - The William Davidson Institute

Multiple version iconThere are 2 versions of this paper

Date Written: March 2001

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.

Keywords: Gravity Model, International Trade, Disintegration, Panel Data

JEL Classification: C23, F13, F15, F41

Suggested Citation

Fidrmuc, Jarko and Fidrmuc, Jan, Disintegration and Trade (March 2001). Center for European Integration Studies (ZEI) Working Paper No. B24-2001. Available at SSRN: https://ssrn.com/abstract=295779 or http://dx.doi.org/10.2139/ssrn.295779

Jarko Fidrmuc

Zeppelin University Friedrichshafen ( email )

Am Seemooser Horn 20
Friedrichshafen, 88045
Germany

Jan Fidrmuc (Contact Author)

Brunel University - Department of Economics and Finance ( email )

Uxbridge UB8 3PH
United Kingdom
+44 1895 266 528 (Phone)
+44 1895 269 770 (Fax)

Centre for Economic Policy Research (CEPR)

77 Bastwick Street
London, EC1V 3PZ
United Kingdom

University of Michigan at Ann Arbor - The William Davidson Institute

724 E. University Ave.
Wyly Hall
Ann Arbor, MI 48109-1234
United States

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