Research

Publications

The Impact of Tariff Changes on Armenia's Foreign Trade, Asian Development Bank, 2021

This report studies the impact of recent, upcoming, and potential series of tariff changes on Armenia's trade and welfare. The results rely on the complementarity between a partial equilibrium tool and a general equilibrium tool, both rooted in the structural gravity model of trade. The report quantifies the negative impact of the convergence of Armenia's tariffs to the tariff of the Eurasian Economic Union (EEU) on trade and welfare. It shows that the free trade agreements between the EEU and third partners such as India, Iran, the People's Republic of China, and Serbia might offset these negative impacts. Finally, the report shows that the impact of the loss of eligibility to the European Union's Generalised Scheme of Preferences should not affect Armenia's trade and welfare much.

Trade elasticities estimated with gravity controls

Trade elasticities estimated with pair fixed effects

The Case for Regional Cooperation in Trade and Investment Finance for Asia, Global Policy, 2020 (w/ A. Chatterjee, A. Goswami and M. Vital) [ADB Brief]

This article reviews the evolution of the role of export credit agencies (ECAs) and their impact on trade and investment. We argue that regional cooperation in Asia would foster regulation and facilitate access to trade and investment finance. Regional cooperation could take the form of regulation aiming at levelling the playing field; or it could go further, with the creation of a multilateral agency that would leverage the industry’s best practices and a good credit standing to facilitate access to trade and investment finance across Asia, particularly in the countries where availability is limited. We review the lessons learnt from existing multilateral ECAs and national ECAs in Asia and argue that these should be carefully considered when designing a new regional ECA.

Une Brève Histoire des Mondialisations Commerciales, in L'Economie Mondiale 2017, La Découverte, 2016 (w/ M. Fouquin and S. Jean) [Video] [Slides]

Working Papers

Breaking Away from Icebreakers: The Effect of Melting Distances on Trade and Welfare, CEPII Working Paper 2017 (w/ C. Umana Dajud)

This article assesses the effect of the opening of Arctic shipping routes on world trade patterns and welfare. We begin by computing shortest bilateral maritime distances with and without Arctic routes. Then, we predict trade flows by combining counterfactual distances with distance elasticities of trade estimated using historical episodes that also affected maritime distances. Our general equilibrium exercise extends beyond by using a structural gravity model that allows trade reallocation across country pairs. As a result, all country pairs are now affected by the opening of Arctic routes, including those for which bilateral distance remains unchanged. In our preferred estimation, world trade is predicted to increase by 0.32% and welfare by 0.02%. The positive effects concentrate in Europe and Northeast Asia, while minor losses affect countries in the Caribbean, West Africa, the Mediterranean and the Indian Ocean

Trade Costs and the Suez and Panama Canals, CEPII Working Paper 2016 (w/ C. Umana Dajud)

Current estimates offer a puzzling picture of the magnitude and historical evolution of the distance elasticity of trade. We take advantage of historical episodes that changed bilateral distance to estimate the distance elasticity in the time dimension and characterize its evolution over time. The openings of the Suez and Panama Canals -- as well as the closure of the Suez Canal from 1967 to 1975 -- allow us to control for unobserved time-invariant country pair characteristics in a gravity setting. Our estimates show that the impact of distance on trade remains particularly low, even if it has increased during the last half century. These results reconcile the distance elasticity of trade with its two components: the elasticity of trade to trade costs and the elasticity of trade costs to distance. In a second stage, we use these estimates to quantify the trade and welfare effects associated with the openings of the Suez and Panama Canals. We also perform the counterfactual exercise of closing the Panama Canal in 2012 to evaluate its current welfare effect.

Back to the Future: International Trade Costs and the Two Globalizations, CEPII Working Paper 2016 (w/ M. Fouquin) [Slides]

This article provides an assessment of the nineteenth century trade globalization based on a systematic collection of bilateral trade statistics. Drawing on a new data set of more than 1.9 million bilateral trade observations for the 1827-2014 period, we show that international trade costs fell more rapidly than intra-national trade costs from the 1840s until the eve of World War I. This finding questions the role played by late nineteenth century improvements in transportation and liberal trade policies in sparking this First Globalization. We use a theory-grounded measure to assess bilateral relative trade costs. Those trade costs are then aggregated to obtain world indices as well as indices along various trade routes, which show that the fall of trade costs began in Europe before extending to the rest of the world. We further explore the geographical heterogeneity of trade cost dynamics by estimating a border effect and a distance effect. We find a dramatic rise in the distance effect for both the nineteenth century and the post-World War II era. This result shows that both modern waves of globalization have been primarily fueled by a regionalization of world trade.

Two Centuries of Bilateral Trade and Gravity Data: 1827-2014, CEPII Working Paper 2016 (w/ M. Fouquin) [Latest Version]

This document provides a detailed description of the Historical Bilateral Trade and Gravity Data set (TRADHIST) that was put together for Fouquin and Hugot (2016) and designed for historical investigations of international trade. The data set is available on the website of CEPII. Specifically, the data set has been built to explore the two modern waves of globalization: the First Globalization of the nineteenth century and the post-World War II Second Globalization. The data set gathers five types of variables: i) bilateral nominal trade flows, ii) country-level aggregate nominal exports and imports, iii) nominal GDPs, iv) exchange rates, and v) bilateral factors that are known to favor or hamper trade, including geographical distance, common borders, colonial and linguistic links, as well as bilateral tariffs. This data is unique both in terms of temporal and geographical coverage. Overall, we gather more than 1.9 million bilateral trade observations for the 188 years from 1827 to 2014. We also provide about 42,000 observations on aggregate trade, and about 14,000 observations on GDPs and exchange rates respectively.

Policy Report

How Does Innovation Affect the Internationalisation Pattern of Firms?, 2012 (w/ Antoine Berthou) [Bruegel Policy Report]

Other Work

The Trade-creating Effect of Migrants: An Empirical Assessment of the Cases of cross-OECD Migrants and French Expatriates, 2010

Les Français Expatriés à Moscou: Modes de Vie et Éléments Structurants, 2008