The GATT/WTO welfare effects: 1950–2015

The GATT/WTO welfare effects: 1950–2015

This paper evaluates the welfare effects of GATT/WTO-induced reductions in tariffs, vari-able and fixed trade costs, based on identified direct effects of membership indicators on trade flows via nonparametric matching estimations. The identification does not require the use of tariff data, which permits a...

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Bibliographic Details
Main Authors: CHANG, Pao-Li, JIN, Wei, YAO, Kefang
Format: text
Language:English
Published: Institutional Knowledge at Singapore Management University 2022
Subjects:
matching estimator
quantitative analysis
welfare
firm entry
income disparity
Growth and Development
International Economics
Online Access:https://ink.library.smu.edu.sg/soe_research/1957
https://ink.library.smu.edu.sg/context/soe_research/article/2956/viewcontent/WTO_MR.pdf
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Institution: Singapore Management University
Language: English
Description
Summary:This paper evaluates the welfare effects of GATT/WTO-induced reductions in tariffs, vari-able and fixed trade costs, based on identified direct effects of membership indicators on trade flows via nonparametric matching estimations. The identification does not require the use of tariff data, which permits a comprehensive evaluation of the welfare impact of GATT/WTO for a long panel since its inception (1950–2015) of as many as 180 economies. The results indicate substantial (but highly dispersed) welfare gains across members of different development stages and increasing welfare losses of nonmembers in later decades by staying outside the system. An extensive set of robustness checks with respect to model specifications, parameter values, and matching estimations are provided. We also characterize the effects of GATT/WTO on cross-country income disparity, its complementarity with preferential trade agreements, and the welfare impacts of China’s WTO entry on the other economies.

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