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The Geographic Space in International Trade: from Gravity to New Economic Geography

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  • Cafiso, Gianluca

Abstract

In this paper we discuss the foundations of two recent trade theories linked by the role that the space-dimension plays in this kind of models. The theories discussed are the Gravity Approach and the New Economic Geography. We dedicate much to the explanation of the micro-foundations of the gravity equation and to the solution of the Border Puzzle achieved in a relevant and innovative paper by Anderson and van Wincoop. Some upto-date empirical applications, which test or use Gravity and NEG relations, are discussed in order to show how much these two theories are used in empirical trade analysis.

Suggested Citation

  • Cafiso, Gianluca, 2007. "The Geographic Space in International Trade: from Gravity to New Economic Geography," MPRA Paper 20269, University Library of Munich, Germany.
  • Handle: RePEc:pra:mprapa:20269
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    File URL: https://mpra.ub.uni-muenchen.de/20269/1/MPRA_paper_20269.pdf
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    References listed on IDEAS

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    Cited by:

    1. Gianluca Cafiso & Roberto Cellini & Tiziana Cuccia, 2015. "Do Economic Crises Lead Tourists to Closer Destinations? An Analysis of Italy's Regional Data," CESifo Working Paper Series 5250, CESifo Group Munich.
    2. Jelena Trivic & Łukasz Klimczak, 2015. "The determinants of intra-regional trade in the Western Balkans," Zbornik radova Ekonomskog fakulteta u Rijeci/Proceedings of Rijeka Faculty of Economics, University of Rijeka, Faculty of Economics, vol. 33(1), pages 37-66.

    More about this item

    Keywords

    Gravity; Trade Costs; Border Puzzle; Economic Geography;

    JEL classification:

    • F10 - International Economics - - Trade - - - General

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