{"title":"The evolution of structural gravity: The workhorse model of trade","authors":"Yoto V. Yotov","doi":"10.1111/coep.12666","DOIUrl":null,"url":null,"abstract":"<p>The gravity model is the workhorse model of trade. Yet, many economists still view gravity as a reduced-form estimating equation and apply it without guidance from theory, while others are skeptical about its usefulness for counterfactual projections. This paper offers a historical overview of the evolution of gravity, from an a-theoretical application to an estimating computable general equilibrium model, which can be nested in more complex frameworks. Along the way, I address some misconceptions about gravity, summarize the current recommendations for gravity estimations, highlight properties that have made gravity so successful, and review the latest contributions to the related literature.</p>","PeriodicalId":47364,"journal":{"name":"Contemporary Economic Policy","volume":"42 4","pages":"578-603"},"PeriodicalIF":1.7000,"publicationDate":"2024-08-11","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":"0","resultStr":null,"platform":"Semanticscholar","paperid":null,"PeriodicalName":"Contemporary Economic Policy","FirstCategoryId":"96","ListUrlMain":"https://onlinelibrary.wiley.com/doi/10.1111/coep.12666","RegionNum":4,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":null,"EPubDate":"","PubModel":"","JCR":"Q2","JCRName":"ECONOMICS","Score":null,"Total":0}
引用次数: 0
Abstract
The gravity model is the workhorse model of trade. Yet, many economists still view gravity as a reduced-form estimating equation and apply it without guidance from theory, while others are skeptical about its usefulness for counterfactual projections. This paper offers a historical overview of the evolution of gravity, from an a-theoretical application to an estimating computable general equilibrium model, which can be nested in more complex frameworks. Along the way, I address some misconceptions about gravity, summarize the current recommendations for gravity estimations, highlight properties that have made gravity so successful, and review the latest contributions to the related literature.
期刊介绍：
Contemporary Economic Policy publishes scholarly economic research and analysis on issues of vital concern to business, government, and other decision makers. Leading western scholars, including three Nobel laureates, are among CEP"s authors. The objectives are to communicate results of high quality economic analysis to policymakers, focus high quality research and analysis on current policy issues of widespread concern, increase knowledge among economists of features of the economy key to understanding the impact of policy, and to advance methods of policy analysis.
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