A Dissection of Trading Capital: Cultural persistence of trade in the aftermath of the fall of the Iron Curtain

We show that the countries of the former Austro-Hungarian monarchy trade significantly more with one another in the aftermath of the collapse of the Iron Curtain than predicted by a standard gravity model. This trade surplus declines linearly and monotonically over time. We argue that these findings suggest that decaying cultural forces explain a significant part of trading capital. We document the rate of decay of these cultural forces.

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Year of publication:	2014-09-11
Authors:	Beestermöller, Matthias ; Rauch, Ferdinand
Institutions:	Volkswirtschaftliche Fakultät, Ludwig-Maximilians-Universität München
Subject:	Trade \| Gravity \| Culture \| Borders \| Habsburg Empire \| Persistence

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Extent:	application/pdf
Series:	Discussion Papers in Economics.
Type of publication:	Book / Working Paper
Classification:	F14 - Country and Industry Studies of Trade ; F15 - Economic Integration ; N33 - Europe: Pre-1913 ; N34 - Europe: 1913- ; N94 - Europe: 1913-
Source:	RePEc - Research Papers in Economics

Persistent link: https://www.econbiz.de/10011019337