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• W1845580929 abstract "The purpose of this paper is to revisit the question if trade promotes peace or not? I accountfor heterogeneity of trade dyads over time in using panel estimation techniques. The world is modeled as a rectangle. I presentmodels focusing on how conflict affects trade, and in another set of models how trade affects conflict.To account for simultaneity I use past values of trade and conflict, as well an instrumentalvariable approach. My instruments to explain conflict are military expenditures anda military capability index. The instrumental variable to explain trade is annual rainfall. I find in most setups that trade and interstate conflict are reciprocal. Trade indeed promotes peace becauseof welfare gained from international trade. Past values of conflict or trade have a negative impact in their respective models. Only after accountingfor endogeneity in using an instrumental variable approach, the negative relationship becomes insignificant or positive in some setups.I employ a dynamic panel estimator to deal with possible limitations of the instrumental variables." @default.
• W1845580929 created "2016-06-24" @default.
• W1845580929 creator A5057437734 @default.
• W1845580929 date "2011-01-01" @default.
• W1845580929 modified "2023-09-27" @default.
• W1845580929 title "Does trade promote peace? squared: a gravity equation in a rectangular panel world" @default.
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• W1845580929 hasPublicationYear "2011" @default.
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