What Can We Learn from Bilateral Trade? Gravity and Beyond
AbstractMuch empirical international trade reserach requires a careful analysis of bilateral trade patterns. In this paper we examine a commonly used technique called the gravity equation. Though the use of the gravity equation on aggregate data is well-grounded in monopolistic competition trade theory, we show that central predictions necessary for its derivation can be rejected with simple tests on disaggregated data.
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Bibliographic InfoPaper provided by Purdue University, Krannert School of Management - Center for International Business Education and Research (CIBER) in its series Papers with number 97-002.
Length: 28 pages
Date of creation: 1997
Date of revision:
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Postal: Purdue University, Center for International Business Education and Research, Krannert Graduate School of Management, 1310 Krannert Building West Lafayette, Indiana 47907-1310.
Web page: http://www.krannert.purdue.edu/
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- F14 - International Economics - - Trade - - - Empirical Studies of Trade
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