Estimating Trade Potential Using Gravity Models: A Review of Recent Literature

Estimating Trade Potential Using Gravity Models: A Review of Recent Literature

This selection presents five significant English publications from the past five years (2014-2018) exploring the estimation of trade potential using gravity models. These studies, authored by non-Chinese researchers, offer valuable insights into this field.

1. Anderson, J. E., & Van Wincoop, E. (2018). Gravity in international trade: A survey. Handbook of commercial policy, 1, 197-261.

This comprehensive survey examines the evolution and application of gravity models in international trade. It discusses the theoretical foundations, empirical methodologies, and policy implications of this widely used framework.

2. Egger, P., & Larch, M. (2017). Gravity model applications and Macroeconomic perspectives. In The Oxford Handbook of the Economics of Global Warming (pp. 161-182). Oxford University Press.

This chapter explores the applications of gravity models within a macroeconomic context, specifically focusing on their relevance to the economics of global warming. It examines how these models can be used to analyze the impact of climate change on trade patterns and economic activity.

3. Baier, S. L., Bergstrand, J. H., & Feng, M. (2014). Economic integration agreements and the margins of international trade. Journal of International Economics, 93(2), 339-350.

This study investigates the impact of economic integration agreements (EIAs) on international trade flows using a gravity model framework. The authors analyze how EIAs influence the margins of trade, such as trade creation and trade diversion.

4. Head, K., & Mayer, T. (2014). Gravity equations: workhorse, toolkit, and cookbook. Handbook of international economics, 4, 131-195.

This chapter provides a comprehensive overview of gravity equations, discussing their theoretical underpinnings, empirical estimation techniques, and various applications in international trade research.

5. Santos Silva, J. M. C., & Tenreyro, S. (2015). Trading partners and trading volumes: implementing the Helpman-Melitz-Rubinstein model empirically. The Economic Journal, 125(583), 1704-1735.

This paper focuses on the empirical implementation of the Helpman-Melitz-Rubinstein model, a prominent general equilibrium model of trade with heterogeneous firms. The authors employ a gravity model approach to analyze the relationship between trading partners and trading volumes.

These five publications represent a diverse range of research on the estimation of trade potential using gravity models. They demonstrate the versatility and importance of this analytical framework in understanding international trade patterns and the factors influencing trade flows.