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Gravity for Undergrads

Author

Listed:
  • 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
    as

    Download full text from publisher

    File URL: https://www.lebow.drexel.edu/sites/default/files/2025-04/202519-cgpa-gravity-undergrads.pdf
    File Function: First version, 2025
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    References listed on IDEAS

    as
    1. Yoto V. Yotov, 2024. "The evolution of structural gravity: The workhorse model of trade," Contemporary Economic Policy, Western Economic Association International, vol. 42(4), pages 578-603, October.
    2. Richard Baldwin & Daria Taglioni, 2006. "Gravity for Dummies and Dummies for Gravity Equations," NBER Working Papers 12516, National Bureau of Economic Research, Inc.
    3. repec:oup:ecpoli:v:15:y:2000:i:30:p:7-46 is not listed on IDEAS
    4. James E. Anderson & Eric van Wincoop, 2003. "Gravity with Gravitas: A Solution to the Border Puzzle," American Economic Review, American Economic Association, vol. 93(1), pages 170-192, March.
    5. repec:bla:ecpoli:v:15:y:2000:i:30:p:7-46 is not listed on IDEAS
    6. 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.
    7. Anderson, James E, 1979. "A Theoretical Foundation for the Gravity Equation," American Economic Review, American Economic Association, vol. 69(1), pages 106-116, March.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    Gravity model; Methods; Teaching; Theory; Estimation;
    All these keywords.

    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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