Competing specifications of the gravity equation: a three-way model, bilateral interaction effects, or a dynamic gravity model with time-varying country effects?
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Dosyalar
Tarih
2014
Yazarlar
Dergi Başlığı
Dergi ISSN
Cilt Başlığı
Yayıncı
Physica-Verlag Gmbh & Co
Erişim Hakkı
info:eu-repo/semantics/closedAccess
Özet
We investigate bilateral trade flows across the EU-15 countries from 1962 to 2003 by different specifications of the gravity model. We augment the basic gravity model with population and exchange rate variables, and then include time-varying country fixed effects, to account for Anderson and van Wincoop (Am Econ Rev 93(1):170-192, 2003) multilateral resistance terms. Then, following the previous theoretical derivations of the gravity model in the presence of panel data in a dynamic setting we change the specification of our gravity model. We compare the results of different specifications showing the improvement in each case. We claim the comparative superiority of the dynamic gravity model with time-varying exporter and importer fixed effects due to its higher explanatory power. Finally, we compare out-of-sample forecasting performance of different specifications of the gravity model.
Açıklama
Kunst, Robert/0000-0001-6831-2471; Nuroglu, Elif/0000-0002-1491-4722
WOS:000331006400014
WOS:000331006400014
Anahtar Kelimeler
Gravity Model, Exporter Effects, Importer Effects, Time Effects, Bilateral Interaction Effects, Time Varying Fixed Effects, Dynamic Gravity
Kaynak
Empirical Economics
WoS Q Değeri
Q3
Scopus Q Değeri
Q1
Cilt
46
Sayı
2
