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A Gravity Model Approach To Analyzing The Trade Performance Of Caricom Member States

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  • Antonio ALLEYNE
  • Troy LORDE

Abstract

This study examines the trade flows in commodities for CARICOM countries through the utilization of the traditional gravity model for international trade. Per capita GDP differential, trade to GDP and language all impact trade positively. On the other hand, geographical distance, exchange rate and unexpectedly, historical trade relationships have negative effects on trade. The results suggest that management of the exchange rate is critical and that CARICOM countries may be served better by trading with countries with higher living standards.

Suggested Citation

  • Antonio ALLEYNE & Troy LORDE, 2014. "A Gravity Model Approach To Analyzing The Trade Performance Of Caricom Member States," Applied Econometrics and International Development, Euro-American Association of Economic Development, vol. 14(2).
  • Handle: RePEc:eaa:aeinde:v:14:y:2014:i:2_10
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    References listed on IDEAS

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    More about this item

    Keywords

    CARICOM; gravity model; bilateral trade; economic integration.;

    JEL classification:

    • F10 - International Economics - - Trade - - - General
    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • F15 - International Economics - - Trade - - - Economic Integration

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