Gravity without apology: the science of elasticities, distance, and trade
Gravity as both fact and theory is one of the great success stories of recent research on international trade, and has featured prominently in the policy debate over Brexit. We first review the facts, noting the overwhelming evidence that trade tends to fall with distance. We then introduce some exp...
| Main Authors: | , , |
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| Format: | Working paper |
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University of Oxford
2020
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| _version_ | 1826294543569387520 |
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| author | Neary, P Carrère, C Mrázová, M |
| author_facet | Neary, P Carrère, C Mrázová, M |
| author_sort | Neary, P |
| collection | OXFORD |
| description | Gravity as both fact and theory is one of the great success stories of recent research on international trade, and has featured prominently in the policy debate over Brexit. We first review the facts, noting the overwhelming evidence that trade tends to fall with distance. We then introduce some expository tools for understanding CES theories of gravity as a simple general-equilibrium system. Next, we point out some anomalies with the theory: mounting evidence against constant trade elasticities, and implausible predictions for bilateral trade balances. Finally, we sketch an approach based on subconvex gravity as a promising direction to resolving them. |
| first_indexed | 2024-03-07T03:47:17Z |
| format | Working paper |
| id | oxford-uuid:bfeacd8a-7555-42e8-9e8b-6d241faeff29 |
| institution | University of Oxford |
| last_indexed | 2024-03-07T03:47:17Z |
| publishDate | 2020 |
| publisher | University of Oxford |
| record_format | dspace |
| spelling | oxford-uuid:bfeacd8a-7555-42e8-9e8b-6d241faeff292022-03-27T05:51:07ZGravity without apology: the science of elasticities, distance, and tradeWorking paperhttp://purl.org/coar/resource_type/c_8042uuid:bfeacd8a-7555-42e8-9e8b-6d241faeff29Bulk import via SwordSymplectic ElementsUniversity of Oxford2020Neary, PCarrère, CMrázová, MGravity as both fact and theory is one of the great success stories of recent research on international trade, and has featured prominently in the policy debate over Brexit. We first review the facts, noting the overwhelming evidence that trade tends to fall with distance. We then introduce some expository tools for understanding CES theories of gravity as a simple general-equilibrium system. Next, we point out some anomalies with the theory: mounting evidence against constant trade elasticities, and implausible predictions for bilateral trade balances. Finally, we sketch an approach based on subconvex gravity as a promising direction to resolving them. |
| spellingShingle | Neary, P Carrère, C Mrázová, M Gravity without apology: the science of elasticities, distance, and trade |
| title | Gravity without apology: the science of elasticities, distance, and trade |
| title_full | Gravity without apology: the science of elasticities, distance, and trade |
| title_fullStr | Gravity without apology: the science of elasticities, distance, and trade |
| title_full_unstemmed | Gravity without apology: the science of elasticities, distance, and trade |
| title_short | Gravity without apology: the science of elasticities, distance, and trade |
| title_sort | gravity without apology the science of elasticities distance and trade |
| work_keys_str_mv | AT nearyp gravitywithoutapologythescienceofelasticitiesdistanceandtrade AT carrerec gravitywithoutapologythescienceofelasticitiesdistanceandtrade AT mrazovam gravitywithoutapologythescienceofelasticitiesdistanceandtrade |