Comparing alternative methods to estimate gravity models of bilateral trade

@inproceedings{Herrera2012ComparingAM,
  title={Comparing alternative methods to estimate gravity models of bilateral trade},
  author={Estrella G{\'o}mez Herrera},
  year={2012}
}
  • Estrella Gómez Herrera
  • Published 2012
The gravity equation has been traditionally used to predict trade flows across countries. However, several problems related with its empirical application still remain unsolved. The unobserved heterogeneity, the presence of heteroskedasticity in trade data or the existence of zero flows, which make the estimation of the logarithm unfeasible, are some of them. This paper provides a survey of the most recent literature concerning the specification and estimation methods of this equation. For a… CONTINUE READING

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