Post by Reto Foellmi

Thrilled that our paper (together with Peter Egger, Ulrich Schetter and David Torun) is published in the Journal of the European Economic Association! We show that history matters for #trade: countries trade much more today if their trade relationship started earlier. If you happened to be on the other side of the #IronCurtain, trade is still around 40 percent lower. This is an important message for the current #tariff turmoil. Negative trade shocks destroy sunk "experience capital" in accessing foreign markets, therefore the current trade uncertainty has potentially huge and long-lasting effects.