Comparing alternative methods to estimate gravity models of bilateral trade
Estrella Gómez Herrera ()
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Estrella Gómez Herrera: Department of Economic Theory and Economic History, University of Granada.
Authors registered in the RePEc Author Service: Estrella Gomez-Herrera ()
No 10/05, ThE Papers from Department of Economic Theory and Economic History of the University of Granada.
The gravity equation has been traditionally used to predict trade flows across countries. However, several problems related with its empirical application still remain unsolved. In this paper, I provide a survey of the recent literature concerning the specification and estimation methods of this equation. In addition, I compare the performance of two widely extended estimators, panel OLS and Poisson Pseudo Maximum Likelihood (PPML), for a dataset covering 80% of world trade.
Keywords: International trade; Gravity model; Estimation methods (search for similar items in EconPapers)
Pages: 29 pages
New Economics Papers: this item is included in nep-ecm and nep-int
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Journal Article: Comparing alternative methods to estimate gravity models of bilateral trade (2013)
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Persistent link: https://EconPapers.repec.org/RePEc:gra:wpaper:10/05
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