Death of distance and the distance puzzle
AbstractDespite the onset of globalization, year-by-year cross-country regressions of the gravity model usually suggest that the impediment of geographical distance on bilateral trade is rising, and not declining, over time. This effect of distance is dubbed the distance puzzle. In this paper, we argue that prima facie evidence of the distance effect from the year-by-year regressions may not be a good indicator of the true impact of distance on trade.
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Bibliographic InfoArticle provided by Elsevier in its journal Economics Letters.
Volume (Year): 116 (2012)
Issue (Month): 2 ()
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Web page: http://www.elsevier.com/locate/ecolet
Distance puzzle; Year-by-year regression; Extensive margin; Intensive margin;
Find related papers by JEL classification:
- F10 - International Economics - - Trade - - - General
- F40 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - General
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