Trade Flows and Spatial Effects: The Gravity Model Revisited
AbstractThe paper revisits the popular gravity model of trade in the light of the increasingly acknowledged findings of spatial econometrics and interprets the results in view of some recent theoretical developments from the economic literature that contribute to its foundation. When the inherent spatial effects are explicitly taken into account, the magnitude of the estimated parameters changes considerably and, with it, the measures on the predicted trade flows. This result is illustrated on the case of predicted trade flows between the EU and some of its potential members.
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Bibliographic InfoPaper provided by Exeter University, Department of Economics in its series Discussion Papers with number 0004.
Length: 24 pages
Date of creation: 2000
Date of revision:
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TRADE ; ECONOMETRICS ; SPATIAL ANALYSIS;
Find related papers by JEL classification:
- F17 - International Economics - - Trade - - - Trade Forecasting and Simulation
- R15 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Econometric and Input-Output Models; Other Methods
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- Ronaldo Daniel Da Mata & Rogério Edivaldo Freitas, 2008. "Produtos Agropecuários: Para quem Exportar?," Discussion Papers 1321, Instituto de Pesquisa Econômica Aplicada - IPEA.
- Rojas, Gina E. Acosta & Calfat, Germán & Flôres Junior, Renato Galvão, 2005. "Trade and Infrastructure: evidences from the Andean Community," Economics Working Papers (Ensaios Economicos da EPGE) 580, FGV/EPGE Escola Brasileira de Economia e Finanças, Getulio Vargas Foundation (Brazil).
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