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Shift of the world's economic center of gravity since 1980 and projected until 2050 [1]. The gravity model of international trade in international economics is a model that, in its traditional form, predicts bilateral trade flows based on the economic sizes and distance between two units. [2]
The gravity model, in its basic form, predicts trade based on the distance between countries and the interaction of the countries' economic sizes. The model mimics the Newtonian law of gravity which also considers distance and physical size between two objects. The model has been shown to have significant empirical validity. [12]
Gravity models are used in various social sciences to predict and describe certain behaviors that mimic gravitational interaction as described in Isaac Newton's laws of gravity. Generally, the social science models contain some elements of mass and distance, which lends them to the metaphor of physical gravity. A gravity model provides an ...
The gravity model of trade in international economics, similar to other gravity models in social science, predicts bilateral trade flows based on the economic sizes of (often using GDP measurements) and distance between two units. The basic theoretical model for trade between two countries takes the form of:
Many increasing returns models feature costs that either fixed or sunk, while it has long been known that trade is a dynamic process. Recently, several authors have proposed a dynamic gravity equation in place of the traditional static gravity equation, including Yotov and Olivero (2012),[4] Campbell (2010),[5] and Campbell (2013).[6]
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Gravity model of trade – Bilateral trade flow model; Import – Good brought into a jurisdiction; Interdependence – Interdisciplinary study of systems; International business – Trade of goods, services, technology, capital's and/or knowledge at a transnational scale; International trade law – Rules for trade between countries
By Leah Douglas and Julie Steenhuysen (Reuters) -California's public health department reported a possible case of bird flu in a child with mild respiratory symptoms on Tuesday, but said there was ...