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A dissection of trading capital: cultural persistence of trade in the aftermath of the fall of the Iron Curtain

Abstract:
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.
Publication status:
Published

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Publisher:
University of Oxford
Series:
Department of Economics Discussion Paper Series
Publication date:
2014-08-13
Paper number:
718


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Pubs id:
1143686
Local pid:
pubs:1143686
Deposit date:
2020-12-15
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