sanguovbobo / Gravity-Model-Trade-vs-Imports

One of the most widely used empirical models to estimate trade flows is the Gravity Model that is based on Newton’s “Law of Universal Gravitation”. This model predicts that the trade flows between two countries will be positively affected by their respective sizes, but negatively by distance. This model has recently come into the spotlight due to t

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Gravity-Model-Trade-vs-Imports

One of the most widely used empirical models to estimate trade flows is the Gravity Model that is based on Newton’s “Law of Universal Gravitation”. This model predicts that the trade flows between two countries will be positively affected by their respective sizes, but negatively by distance. This model has recently come into the spotlight due to the disagreement between opposers and supporters of Brexit about the relevance of distance on bi-lateral trade. In this project I will apply a simplified gravity model to estimate the importance of the Gravity-Model variables, e.g. distance using various econometric techniques on statistical programme R and use Excel to clean my data.

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One of the most widely used empirical models to estimate trade flows is the Gravity Model that is based on Newton’s “Law of Universal Gravitation”. This model predicts that the trade flows between two countries will be positively affected by their respective sizes, but negatively by distance. This model has recently come into the spotlight due to t


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