Arbeitspapier
Gravity at Sixty: The Workhorse Model of Trade
On the eve of its 60th anniversary, the gravity model of trade is a 'celebrity', due to its intuitive appeal, solid theoretical foundations, and remarkable empirical success. Yet, many economists still view gravity simply as an intuitive but naive reduced-form estimating equation and apply it without guidance from theory, while others are skeptical about its usefulness for counterfactual projections. The objective of this paper is to offer a historical overview of its evolution from an a-theoretical application to an estimating computable general equilibrium (E-CGE) model, which can be nested in more complex frameworks. Along the way, I address some misconceptions about the gravity model, summarize the current best practices for gravity estimations, and highlight some properties that have made gravity so successful.
- Sprache
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Englisch
- Erschienen in
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Series: CESifo Working Paper ; No. 9584
- Klassifikation
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Wirtschaft
Trade Policy; International Trade Organizations
Empirical Studies of Trade
Trade and Labor Market Interactions
- Thema
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structural gravity
evolution
theory
estimation general equilibrium
- Ereignis
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Geistige Schöpfung
- (wer)
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Yotov, Yoto V.
- Ereignis
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Veröffentlichung
- (wer)
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Center for Economic Studies and ifo Institute (CESifo)
- (wo)
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Munich
- (wann)
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2022
- Handle
- Letzte Aktualisierung
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20.09.2024, 08:23 MESZ
Datenpartner
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Objekttyp
- Arbeitspapier
Beteiligte
- Yotov, Yoto V.
- Center for Economic Studies and ifo Institute (CESifo)
Entstanden
- 2022