Journal article
On the role of domestic trade flows for estimating the gravity model of trade
Contemporary economic policy, v 40(3), pp 526-540
01 Feb 2022
Featured in Collection : UN Sustainable Development Goals @ Drexel
Abstract
The gravity equation is the workhorse model of trade. Despite solid theoretical foundations and clear gains from theory-consistent policy analysis, there are still gaps between gravity theory and empirics. This paper focuses on domestic trade flows, and I argue that there are significant benefits from adhering to theory by estimating gravity equations with domestic (in addition to international) trade flows. I review the related literature and synthesize 15 arguments for using domestic trade flows in gravity estimations. The analysis reveals the need for further theory contributions and new data developments, and points to opportunities for more policy applications.
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Details
- Title
- On the role of domestic trade flows for estimating the gravity model of trade
- Creators
- Yoto Yotov - Drexel University
- Publication Details
- Contemporary economic policy, v 40(3), pp 526-540
- Publisher
- Wiley
- Number of pages
- 15
- Resource Type
- Journal article
- Language
- English
- Academic Unit
- Economics (School of Economics)
- Web of Science ID
- WOS:000749252400001
- Scopus ID
- 2-s2.0-85123908980
- Other Identifier
- 991019167474404721
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- Web of Science research areas
- Economics
- Public Administration