The geometry of the distance coefficient in gravity equations in international trade
Gravity equations in trade imply that trade flows are proportional to the size of a country and inversely proportional to distance. This paper develops the analogy of gravity in physics with gravity in trade and provides geometric intuition for a large class of mathematical processes in two-dimensional space for which these relationships would be expected. This model implies that distances between countries in empirical gravity estimations should be measured as weighted harmonic means of pairwise distances of local economic activity. ? 2016 John Wiley & Sons Ltd
1 November 2016
Review of International Economics 24(5) , pp.1167-1177, 2016
https://onlinelibrary.wiley.com/doi/10.1111/roie.12252
This Journal article is published under the centre's Urban programme.