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| Author: | Sanso, M. Cuairan, R. Sanz, F. |
| Title: | Bilateral trade flows, the gravity equation, and functional form |
| Journal: | Review of Economics and Statistics
1993 : MAY, VOL. 75:2, p. 266-275 |
| Index terms: | BILATERAL TRADE EQUATIONS STATISTICS |
| Language: | eng |
| Abstract: | The gravity equation has been frequently and successfully used for nearly thirty years to further understanding of the determinants of bilateral trade flows across countries and, subsequently, to analyze commercial policy measures. A maintained hypothesis by the applied literature on international trade as gravity equation loglinearity is questioned in this paper since the possibility of a general functional form is open through Box-Cox transformations. The authors conclude that the optimal functioal form is slightly different from the loglinear form in every year of the sample and they are able to propose one unique functional form suitable for all the sample period. |
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