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I added a sentence on other uses of the model, but really think that the whole article should be about the (economic) gravity model in general and not just the gravity model of trade. Nowadays the model is so frequently used for all kinds of bilateral data that the field of trade should not claim it as its own. And I don't see how trade has such a special way of using it that it justifies an extra wiki. Could we maybe make a special subsection for how trade GMs are different from others (i.e. probably talking about MRT)? Asdir ( talk) 09:17, 15 September 2015 (UTC)
In the model, isn't the Distance term supposed to be squared?
Because you log the multiplicative equation you can actually estimate the coefficient of the log linear regression which tells you whether β3 is a square or not. The way it is presented now is as if the estimate forced the ln Distance coefficient to equal one when making the estimation. I favor the more general formulation which reflects actual empirical practice more accurately. radek ( talk) 08:12, 13 January 2010 (UTC)
As it stands, this article focuses on comparisons of this model to other trade models. Yet the time was never taken to demonstrate its validity. The brief discussion on quantitative aspects are relegated to one small paragraph and three equations. More concerning, there is no presentation at all of how well the data actually fits, aside from tossing around phrases like empirical success. I am a physicist, not an economist, but it seems to me that the principal gauge of the theories success lies in establishing a global value for the fitting parameter G. Yet a value is never given, nor an error, nor a chi-squared, nor scatter plots of real data and fits, let alone a general discussion of its importance/characteristics. With this in mind it would be nice if someone could expand the article by discussing the G factor. Namely,
I was originally intruiged when I heard that a gravity based model could be used to describe trade. However, this article does a disservice by simply tossing out a few equations and then spending the rest of the time running through a "this person thinks this while this person thinks that and these people think this is distinct from that, etc." It gives the impression of a social science tinkering with math without applying the appropriate rigor and then falling back into debating the specificities of other peoples stances. I assume this is a false impression, and it would be nice if someone could take the time to describe the foundation of the models validity. Lharriger ( talk) 22:25, 3 October 2011 (UTC)
The article nowhere states what the are. Are they universal constants that are the same for all trade systems? Are they fit constants to be estimated for each situation individually? Or are they specific to the situation, but can be calculated? Also, what are the (typical) values of those? About 1? About 2? About a million? -- 93.134.52.31 ( talk) 07:44, 8 September 2015 (UTC)
Dr. Vezina has reviewed this Wikipedia page, and provided us with the following comments to improve its quality:
1. Where F is the trade flow, M is the economic mass of each country, D is the distance and G is a constant. The model has also been used in international relations to evaluate the impact of treaties and alliances on trade, and it has been used to test the effectiveness of trade agreements and organizations such as the North American Free Trade Agreement (NAFTA) and the World Trade Organization (WTO).
Changes:
Where F is the trade flow, M is the economic mass of each country, D is the distance and G is a constant. The model has been used by economists to analyse the determinants of bilateral trade flows such as common borders, common languages, common legal systems, common currencies, common colonial legacies, and it has been used to test the effectiveness of trade agreements and organizations such as the North American Free Trade Agreement (NAFTA) and the World Trade Organization (WTO) (Head and Mayer 2014). The model has also been used in international relations to evaluate the impact of treaties and alliances on trade.
Citation: "Gravity Equations: Workhorse, Toolkit, Cookbook" (Keith Head and Thierry Mayer), Elsevier's Handbook of International Economics Vol. 4
2. In applied work, the model is often extended by including variables to account for language relationships, tariffs, contiguity, access to sea, colonial history, exchange rate regimes, and other variables of interest.
Changes:
In applied work, the model is often extended by including variables to account for language relationships, tariffs, contiguity, access to sea, colonial history, and exchange rate regimes. Yet the estimation of structural gravity, based on Anderson and van Wincoop (2003), requires the inclusion of importer and exporter fixed effects, thus limiting the gravity analysis to bilateral trade costs (Baldwin and Taglioni 2007).
Cite: Baldwin, R., Taglioni, D., 2007. Trade effects of the euro: A comparison of estimators. Journal of Economic Integration 22 (4), 780–818.
3. Remove this section as not relevant:Dynamic Gravity Equation[edit] The gravity equation of international trade is often motivated using New Trade Theory models, which are models of increasing returns.[3] Many increasing returns models feature costs that either fixed or sunk, while it has long been known that trade is a dynamic process. Recently, several authors have proposed a dynamic gravity equation in place of the traditional static gravity equation, including Yotov and Olivero (2012),[4] Campbell (2010),[5] and Campbell (2013).[6] The dynamic gravity equation, in its most general form, posits that bilateral trade between country i and j is a function of the size of each country, the current trade costs, and the past trade costs. ln(F_{ij,t}) = ln(Y_i Y_j) - a ln(\tau_{ij,t}) - b ln(\tau_{ij,t-1})
Empirically, the idea that trade flows are determined by historical forces is confirmed by the evidence offered in Eichengreen and Irwin (1996),[7] Campbell (2010), and Campbell (2013). Campbell (2013)[8] shows that empirical estimations using a dynamic gravity equation can have an enormous impact on the measured impact of policy variables, such as the impact of currency unions on trade.
We hope Wikipedians on this talk page can take advantage of these comments and improve the quality of the article accordingly.
Dr. Vezina has published scholarly research which seems to be relevant to this Wikipedia article:
ExpertIdeasBot ( talk) 16:09, 19 May 2016 (UTC)
Dr. Santos Silva has reviewed this Wikipedia page, and provided us with the following comments to improve its quality:
Delete the following passage: This is despite the fact that simpler methods, such as taking simple averages of trade shares of countries with and without former colonial ties suggest that countries with former colonial ties continue to trade more. Santos Silva and Tenreyro (2006) did not explain where their result came from and even failed to realize their results were highly anomalous.
We hope Wikipedians on this talk page can take advantage of these comments and improve the quality of the article accordingly.
Dr. Santos Silva has published scholarly research which seems to be relevant to this Wikipedia article:
ExpertIdeasBot ( talk) 11:02, 28 May 2016 (UTC)
Dr. Anderson has reviewed this Wikipedia page, and provided us with the following comments to improve its quality:
This article fails to explain the gravity model, the purpose of its title. It contains much distracting material about connection of gravity to other economic models, some OK material on empirical application of gravity, and misses most of the main theoretical and empirical developments of the last 15 years that have moved gravity from a fringe model scorned by mainstream economics to a central part of mainstream research appearing in textbooks and leading journals. I was so irritated by its deficiencies that I wrote a substitute article (based on teaching materials I have developed). My submission focuses on the model, with applications details used where they illuminate the model's properties and to some extent usefulness. As one of the principal movers in this development (my 2003 paper is cited but its main ideas not used at all) I feel strongly that you should try to replace the current misleading and hardly usable article with an article based on my submission, perhaps altered by others I will mention below and in any case suitably vetted by them. I am not interested in authorship, just in providing the wikipedia readers with a useful product. Here is a link to my file: https://www2.bc.edu/james-anderson/GravityModel.pdf
We hope Wikipedians on this talk page can take advantage of these comments and improve the quality of the article accordingly.
Dr. Anderson has published scholarly research which seems to be relevant to this Wikipedia article:
ExpertIdeasBot ( talk) 04:51, 16 June 2016 (UTC)
This article is missing information about comparisons of empirical data and theoretical predictions. |
It would be better to do more showing and less telling, or at least some showing of 1.) what kinds of metrics are typically used, and 2.) how empirical measurements compare to theoretical predictions. -- Beland ( talk) 23:26, 17 March 2023 (UTC)
This article is rated Start-class on Wikipedia's
content assessment scale. It is of interest to the following WikiProjects: | |||||||||||||||||||||
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I added a sentence on other uses of the model, but really think that the whole article should be about the (economic) gravity model in general and not just the gravity model of trade. Nowadays the model is so frequently used for all kinds of bilateral data that the field of trade should not claim it as its own. And I don't see how trade has such a special way of using it that it justifies an extra wiki. Could we maybe make a special subsection for how trade GMs are different from others (i.e. probably talking about MRT)? Asdir ( talk) 09:17, 15 September 2015 (UTC)
In the model, isn't the Distance term supposed to be squared?
Because you log the multiplicative equation you can actually estimate the coefficient of the log linear regression which tells you whether β3 is a square or not. The way it is presented now is as if the estimate forced the ln Distance coefficient to equal one when making the estimation. I favor the more general formulation which reflects actual empirical practice more accurately. radek ( talk) 08:12, 13 January 2010 (UTC)
As it stands, this article focuses on comparisons of this model to other trade models. Yet the time was never taken to demonstrate its validity. The brief discussion on quantitative aspects are relegated to one small paragraph and three equations. More concerning, there is no presentation at all of how well the data actually fits, aside from tossing around phrases like empirical success. I am a physicist, not an economist, but it seems to me that the principal gauge of the theories success lies in establishing a global value for the fitting parameter G. Yet a value is never given, nor an error, nor a chi-squared, nor scatter plots of real data and fits, let alone a general discussion of its importance/characteristics. With this in mind it would be nice if someone could expand the article by discussing the G factor. Namely,
I was originally intruiged when I heard that a gravity based model could be used to describe trade. However, this article does a disservice by simply tossing out a few equations and then spending the rest of the time running through a "this person thinks this while this person thinks that and these people think this is distinct from that, etc." It gives the impression of a social science tinkering with math without applying the appropriate rigor and then falling back into debating the specificities of other peoples stances. I assume this is a false impression, and it would be nice if someone could take the time to describe the foundation of the models validity. Lharriger ( talk) 22:25, 3 October 2011 (UTC)
The article nowhere states what the are. Are they universal constants that are the same for all trade systems? Are they fit constants to be estimated for each situation individually? Or are they specific to the situation, but can be calculated? Also, what are the (typical) values of those? About 1? About 2? About a million? -- 93.134.52.31 ( talk) 07:44, 8 September 2015 (UTC)
Dr. Vezina has reviewed this Wikipedia page, and provided us with the following comments to improve its quality:
1. Where F is the trade flow, M is the economic mass of each country, D is the distance and G is a constant. The model has also been used in international relations to evaluate the impact of treaties and alliances on trade, and it has been used to test the effectiveness of trade agreements and organizations such as the North American Free Trade Agreement (NAFTA) and the World Trade Organization (WTO).
Changes:
Where F is the trade flow, M is the economic mass of each country, D is the distance and G is a constant. The model has been used by economists to analyse the determinants of bilateral trade flows such as common borders, common languages, common legal systems, common currencies, common colonial legacies, and it has been used to test the effectiveness of trade agreements and organizations such as the North American Free Trade Agreement (NAFTA) and the World Trade Organization (WTO) (Head and Mayer 2014). The model has also been used in international relations to evaluate the impact of treaties and alliances on trade.
Citation: "Gravity Equations: Workhorse, Toolkit, Cookbook" (Keith Head and Thierry Mayer), Elsevier's Handbook of International Economics Vol. 4
2. In applied work, the model is often extended by including variables to account for language relationships, tariffs, contiguity, access to sea, colonial history, exchange rate regimes, and other variables of interest.
Changes:
In applied work, the model is often extended by including variables to account for language relationships, tariffs, contiguity, access to sea, colonial history, and exchange rate regimes. Yet the estimation of structural gravity, based on Anderson and van Wincoop (2003), requires the inclusion of importer and exporter fixed effects, thus limiting the gravity analysis to bilateral trade costs (Baldwin and Taglioni 2007).
Cite: Baldwin, R., Taglioni, D., 2007. Trade effects of the euro: A comparison of estimators. Journal of Economic Integration 22 (4), 780–818.
3. Remove this section as not relevant:Dynamic Gravity Equation[edit] The gravity equation of international trade is often motivated using New Trade Theory models, which are models of increasing returns.[3] Many increasing returns models feature costs that either fixed or sunk, while it has long been known that trade is a dynamic process. Recently, several authors have proposed a dynamic gravity equation in place of the traditional static gravity equation, including Yotov and Olivero (2012),[4] Campbell (2010),[5] and Campbell (2013).[6] The dynamic gravity equation, in its most general form, posits that bilateral trade between country i and j is a function of the size of each country, the current trade costs, and the past trade costs. ln(F_{ij,t}) = ln(Y_i Y_j) - a ln(\tau_{ij,t}) - b ln(\tau_{ij,t-1})
Empirically, the idea that trade flows are determined by historical forces is confirmed by the evidence offered in Eichengreen and Irwin (1996),[7] Campbell (2010), and Campbell (2013). Campbell (2013)[8] shows that empirical estimations using a dynamic gravity equation can have an enormous impact on the measured impact of policy variables, such as the impact of currency unions on trade.
We hope Wikipedians on this talk page can take advantage of these comments and improve the quality of the article accordingly.
Dr. Vezina has published scholarly research which seems to be relevant to this Wikipedia article:
ExpertIdeasBot ( talk) 16:09, 19 May 2016 (UTC)
Dr. Santos Silva has reviewed this Wikipedia page, and provided us with the following comments to improve its quality:
Delete the following passage: This is despite the fact that simpler methods, such as taking simple averages of trade shares of countries with and without former colonial ties suggest that countries with former colonial ties continue to trade more. Santos Silva and Tenreyro (2006) did not explain where their result came from and even failed to realize their results were highly anomalous.
We hope Wikipedians on this talk page can take advantage of these comments and improve the quality of the article accordingly.
Dr. Santos Silva has published scholarly research which seems to be relevant to this Wikipedia article:
ExpertIdeasBot ( talk) 11:02, 28 May 2016 (UTC)
Dr. Anderson has reviewed this Wikipedia page, and provided us with the following comments to improve its quality:
This article fails to explain the gravity model, the purpose of its title. It contains much distracting material about connection of gravity to other economic models, some OK material on empirical application of gravity, and misses most of the main theoretical and empirical developments of the last 15 years that have moved gravity from a fringe model scorned by mainstream economics to a central part of mainstream research appearing in textbooks and leading journals. I was so irritated by its deficiencies that I wrote a substitute article (based on teaching materials I have developed). My submission focuses on the model, with applications details used where they illuminate the model's properties and to some extent usefulness. As one of the principal movers in this development (my 2003 paper is cited but its main ideas not used at all) I feel strongly that you should try to replace the current misleading and hardly usable article with an article based on my submission, perhaps altered by others I will mention below and in any case suitably vetted by them. I am not interested in authorship, just in providing the wikipedia readers with a useful product. Here is a link to my file: https://www2.bc.edu/james-anderson/GravityModel.pdf
We hope Wikipedians on this talk page can take advantage of these comments and improve the quality of the article accordingly.
Dr. Anderson has published scholarly research which seems to be relevant to this Wikipedia article:
ExpertIdeasBot ( talk) 04:51, 16 June 2016 (UTC)
This article is missing information about comparisons of empirical data and theoretical predictions. |
It would be better to do more showing and less telling, or at least some showing of 1.) what kinds of metrics are typically used, and 2.) how empirical measurements compare to theoretical predictions. -- Beland ( talk) 23:26, 17 March 2023 (UTC)