The Gravity Model of Trade

Massimiliano Porto
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Massimiliano Porto: Kobe University

Chapter Chapter 4 in Using R for Trade Policy Analysis, 2020, pp 65-81 from Springer

Abstract: Abstract The gravity model for international trade was introduced by Jan Tinbergen in 1962. This model was based on an equation that approximated the theory of gravitation of Newton and therefore it is known as the gravity equation. Basically, the model shows that trade flows between two countries are positively affected by the size of the gross domestic product (GDP) of the two countries and negatively affected by their distance.

Date: 2020
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DOI: 10.1007/978-3-030-34529-7_4

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