What Has Determined the Rapid Post-War Growth of Intra-Eu Trade?

Review of World Economics, Vol. 140, No. 1, pp. 31-51, 2004

Posted: 17 Aug 2004

See all articles by Fritz Breuss

Fritz Breuss

Vienna University of Economics and Bus. Admin., Europe Institute

Harald Badinger

Vienna University of Economics and Business

Abstract

Based on the gravity model by Baier and Bergstrand (2001), we use a static and dynamic panel approach to estimate the determinants of the growth of intra-EU trade from 1960 to 2000. The results suggest that income growth was the major force, accounting for approximately two-thirds of total growth. Trade liberalization still had a sizeable effect, while other factors had only a little impact (income convergence, real effective exchange rate changes) or played no role (trade costs). Our estimation results for intra-EU trade, using a variety of extensions, underline the robustness of the Baier-Bergstrand cross-section findings for world trade.

Keywords: European integration, gravity model, international trade

JEL Classification: C23, F12, F14, F15

Suggested Citation

Breuss, Fritz and Badinger, Harald, What Has Determined the Rapid Post-War Growth of Intra-Eu Trade?. Review of World Economics, Vol. 140, No. 1, pp. 31-51, 2004, Available at SSRN: https://ssrn.com/abstract=576241

Fritz Breuss (Contact Author)

Vienna University of Economics and Bus. Admin., Europe Institute ( email )

Althanstrasse 39-45
1090 Vienna
Austria

Harald Badinger

Vienna University of Economics and Business ( email )

Department of Economics
Althanstrasse 39-45
Vienna, 1090
Austria

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