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The Olympic Effect


  •  Corresponding author: Andrew K. Rose, Haas School of Business, University of California, Berkeley, CA 94720-1900, USA. Email:

  • We thank Christopher Candelaria for excellent research assistance, and Keith Head for help with his tetradic programs. For comments, we thank: Antonio Ciccone, John Fernald; Reuven Glick; Yuri Gorodnichenko; Pierre-Olivier Gourinchas; Galina Hale; Dennis Novy; Assaf Razin; Glenn Rudebusch; Jay Shambaugh; Bent Sorensen; Eric Swanson; Linda Tesar; Shang-Jin Wei; John Williams; Eric van Wincoop; two anonymous referees; and workshop participants at Berkeley, Copenhagen, FRBSF, NBER, Tsinghua and UCSD. More extensive, earlier and current versions of this article are available at:, along with the relevant data sets and sample output. The views presented in this article are those of authors and do not represent the views of the Federal Reserve Bank of San Francisco or the Board of Governors of the Federal Reserve.


Why should countries offer to host costly ‘mega-events’ such as the Olympic Games? We show that hosting a mega-event increases exports. This effect is statistically robust, permanent and large; trade is over 20% higher for host countries. Interestingly, unsuccessful bids to host the Olympics have a similar impact on exports. We conclude that the Olympic effect on trade is attributable to the signal a country sends when bidding to host the games, rather than the act of actually holding a mega-event. We develop an appropriate formal model and derive conditions under which liberalising countries will signal through a mega-event bid.

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