What Can We Learn from Bilateral Trade? Gravity and Beyond

Jon Haveman () and David Hummels

Working Papers from Purdue University, Krannert School of Management - Center for International Business Education and Research (CIBER)

Abstract: Much empirical international trade reserach requires a careful analysis of bilateral trade patterns. In this paper we examine a commonly used technique called the gravity equation. Though the use of the gravity equation on aggregate data is well-grounded in monopolistic competition trade theory, we show that central predictions necessary for its derivation can be rejected with simple tests on disaggregated data.

Keywords: INTERNATIONAL; TRADE (search for similar items in EconPapers)
JEL-codes: F14 (search for similar items in EconPapers)
Pages: 28 pages
Date: 1997
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Citations: View citations in EconPapers (13)

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Persistent link: https://EconPapers.repec.org/RePEc:fth:purkib:97-002

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