CPD Working Paper 61
Trade Potentials in SAFTA: An Application of Augmented Gravity Model
The present paper investigates the trade creation and trade diversion effects of a number of Regional Trade Agreements (RTAs), with special focus on the SAFTA, by using a gravity model. Apart from the traditional gravity variables, the model is augmented by some other import variables (e.g. bilateral exchange rate and bilateral free trade agreement). The model developed in this paper is estimated by using panel data approach with country-pair-specific, as well as year-specific fixed effects.
Contributors: Mustafizur Rahman, Wasel Bin Shadat and Narayan Chandra Das
Publication Period: December 2006
