Gravity Model of Trade

Gravity Model: trade flows are proportional to GDP product and inversely proportional to distance; large economies with short distance have high trade.

Research Explained

The Gravity Model of Trade: Predicting Bilateral Trade Flows (And Why It Still Rules)

The gravity model of trade predicts bilateral flows based on economic size and distance. Rooted in Newtonian physics and now...

March 22, 2026