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Gravity Models in International Trade: An Exploration in Econo-Physics

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  • Iman Pal
  • Saibal Kar

Abstract

Several strands of the static and dynamic theoretical constructs and the empirical applications in the subject of economics owe substantially to the well-known principles of physical sciences. The present article explores as to how the development of the popular gravity models in international trade can be traced back to Newton’s law of gravitation, and to both Ohm’s Law and Kirchhoff’s Law of current electricity, as well as to the pattern recognition techniques commonly deployed in scientific applications. In addition to surveying these theoretical analogies, the article also offers numerical applications for observed trade patterns between India and a set of countries. JEL Classifications: F41, F42, C61, F47

Suggested Citation

  • Iman Pal & Saibal Kar, 2021. "Gravity Models in International Trade: An Exploration in Econo-Physics," South Asian Journal of Macroeconomics and Public Finance, , vol. 10(1), pages 72-104, June.
    • Handle: RePEc:sae:smppub:v:10:y:2021:i:1:p:72-104
    DOI: 10.1177/2277978721989922
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    References listed on IDEAS

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    Cited by:

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    More about this item

    Keywords

    International trade; gravity models; Ohm’s Law; cross-country; India;
    All these keywords.

    JEL classification:

    • F41 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Open Economy Macroeconomics
    • F42 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - International Policy Coordination and Transmission
    • C61 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Optimization Techniques; Programming Models; Dynamic Analysis
    • F47 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Forecasting and Simulation: Models and Applications

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