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Title: Disintegration and Trade

Author(s): Jan Fidrmuc and Jarko Fidrmuc

Publication Date: December 2000

Keyword(s): Disintegration, Gravity Model and International Trade

Programme Area(s): International Trade and Regional Economics and Transition Economics

Abstract: The gravity model of trade is utilized to assess the impact of disintegration on trade. The analysis is based on three recent disintegration episodes involving the former Soviet Union, Yugoslavia and Czechoslovakia. The results point to a very strong home bias around the time of disintegration, with intra-union trade exceeding normal trade approximately 43 times in the former Soviet Union and Czechoslovakia, and 24 times in the former Yugoslavia. Disintegration was followed by a sharp fall in trade intensity. Nevertheless, there is a considerable hysteresis in economic relations, with trade flows among the former constituent Republics still between two and 30 times greater than normal trade in 1998.

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Bibliographic Reference

Fidrmuc, J and Fidrmuc, J. 2000. 'Disintegration and Trade'. London, Centre for Economic Policy Research. https://cepr.org/active/publications/discussion_papers/dp.php?dpno=2641