Wolfgang Keller, Carol Shiue, 19 December 2013

Estimating the trade effect of trade agreements is no easy task. Agreements with higher trade returns may be formed before agreements with lower returns, and comparing these naïvely could bias our estimates of the true effects. This column studies the case of the German Zollverein of 1834 to show that it is important to examine the sequence of membership to estimate the effects of trade agreements.

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