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Gravity for Undergrads

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  • Yoto Yotov

    (School of Economics, Drexel University)

Abstract

The gravity equation is the "workhorse" model of international trade and the most popular tool for trade policy analysis. Yet, despite its solid theoretical foundations, remarkable empirical success, intuitive appeal, and ease of implementation, the gravity equation has not received proper introduction and well-deserved coverage that would enable and enhance research by undergraduate students and novices to the gravity literature. The objective of this chapter to introduce the gravity model of trade to the undergraduate student and to translate the theoretical gravity equation into an econometric model that can be used for a wide range of research projects and policy analysis.

Suggested Citation

  • Yoto Yotov, 2025. "Gravity for Undergrads," Working Papers 202519, Center for Global Policy Analysis, LeBow College of Business, Drexel University.
    • Handle: RePEc:drx:wpaper:202519
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    File URL: https://www.lebow.drexel.edu/sites/default/files/2025-04/202519-cgpa-gravity-undergrads.pdf
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    References listed on IDEAS

    as
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    2. Baldwin, Richard & Taglioni, Daria, 2006. "Gravity for Dummies and Dummies for Gravity Equations," CEPR Discussion Papers 5850, C.E.P.R. Discussion Papers.
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    9. Andrew K. Rose, 2000. "One money, one market: the effect of common currencies on trade," Economic Policy, CEPR, CESifo, Sciences Po;CES;MSH, vol. 15(30), pages 08-45.
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    Keywords

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    JEL classification:

    • F10 - International Economics - - Trade - - - General
    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • F16 - International Economics - - Trade - - - Trade and Labor Market Interactions

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