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Due to the new health measures, seminar will be online only until further notice. Follow the IRES Lunch Seminar via this link on Teams. For non-UCLouvain participants, please email the organizers if you wish to participate. |
Jean-François Maystadt
IRES/LIDAM, UCLouvain
will give a presentation on
The Gravity of Distance : Evidence from a Trade Embargo
Abstract
On June 5, 2017, an airspace blockade has been imposed on the state of Qatar by four of its neighbours: Saudi Arabia, Bahrain, United Arab Emirates, and Egypt. In this paper, we exploit the exogenous increase in air transportation cost to examine the effect of increased travel distance on bilateral trade. Based on a gravity model estimated with a Poisson pseudo-maximum likelihood, we find a distance elasticity of trade close to -0.6. Such effects are mainly driven by changes in imports. Our findings revise downwards cross-sectional estimates of the distance elasticity of trade. However, they confirm the estimates from more recent literature that exploit similar time-varying shocks to distance.
with Afnan Al-Malk and Maurizio Zanardi