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. Appendix, World Development Indicators (WDI) Note that in accordance to trade flows, GDPs are not deflated Since the WDI excludes Taiwan, we use national data sources. WDI also starts in 1960 and sometimes does not keep track of countries that ceased to exit, or changed definitions. Typically, WDI has Russian GDP starting in 1989 In order to correct both problems, we complement WDI with population estimates provided by Angus Maddison (http://www. ggdc.net/maddison/Historical_Statistics/horizontal-file_10-2006.xls). Furthermore

G. Wto, The data on currency unions are an updated and extended version of the list provided by Glick and Rose Data on common legal origins of the two countries are available from Andrei Shleifer at http://post.economics.harvard.edu/faculty/ shleifer/Data/qgov_web.xls. Bilateral distances and common (official) language come from the CEPII distance database, 2002.

. Htm, We use the population-weighted great circle distance between large cities of the two countries