American Economic Journal:
Macroeconomics
ISSN 1945-7707 (Print) | ISSN 1945-7715 (Online)
The Geography of Conflicts and Regional Trade Agreements
American Economic Journal: Macroeconomics
vol. 4,
no. 4, October 2012
(pp. 1–35)
Abstract
In addition to standard trade gains, regional trade agreements (RTAs) can promote peaceful relations by increasing the opportunity cost of conflicts. Country pairs with large trade gains from RTAs and a high probability of conflict should be more likely to sign an RTA. Using data from 1950 to 2000, we show that this complementarity between economic and politics determines the geography of RTAs. We disentangle trade gains from political factors by a theory-driven empirical estimation and find that country pairs with higher frequency of past wars are more likely to sign RTAs, the more so the larger the trade gains. (JEL D72, D74, F15, N70)Citation
Martin, Philippe, Thierry Mayer, and Mathias Thoenig. 2012. "The Geography of Conflicts and Regional Trade Agreements." American Economic Journal: Macroeconomics, 4 (4): 1–35. DOI: 10.1257/mac.4.4.1Additional Materials
JEL Classification
- D72 Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
- D74 Conflict; Conflict Resolution; Alliances
- F15 Economic Integration
- N70 Economic History: Transport, International and Domestic Trade, Energy, Technology, and Other Services: General, International, or Comparative
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