Campbell, Douglas L. (2010): History, culture, and trade: a dynamic gravity approach.
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What determines trade patterns? Habit persistence in consumer tastes and learning-by-doing in production imply that history and culture are key determinants. Deriving a dynamic gravity equation from a simple model, it is shown that cultural similarity is a product of history, so that trade patterns are a function of bilateral GDP, current trade costs, and the past history of trade costs. Using a trade data set which spans from 1870 to 2000, it is shown that many gravity variables operate via lagged trade, that historical trade shocks matter, and that trade patterns are persistent, even across centuries.
|Item Type:||MPRA Paper|
|Original Title:||History, culture, and trade: a dynamic gravity approach|
|Keywords:||Dynamic Gravity Equation, Endogenous Preferences, Habit Persistence, Learning- By-Doing|
|Subjects:||F - International Economics > F1 - Trade > F10 - General
N - Economic History > N7 - Transport, Trade, Energy, Technology, and Other Services > N70 - General, International, or Comparative
|Depositing User:||Doug Campbell|
|Date Deposited:||21. Jul 2010 18:04|
|Last Modified:||12. Feb 2013 15:55|
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