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Review of the gravity model: origins and critical analysis of its theoretical development

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  • Luigi Capoani

    (University of Trieste)

Abstract

This article presents a bibliographic review of the gravitational model in international trade from when it was first associated with Newton's law of universal gravitation. Firstly, I will introduce the concept of gravity in commerce as originally intended by Isard (Q J Econ 68(2):305–320, 1954) in relation to Tinbergen and Tobler’s approaches. Secondly, I will analyse the theoretical roots of international economics according to several authors, including McCallum, Anderson and van Wincoop, Krugman, Tranos, and Nijkamp. Thirdly, attention will be drawn to the evolution of the ideas of the authors mentioned above upon Isard’s initial approach rooted in physics. Furthermore, I will focus on how the tool rooted in physics can be applied or adapted to international trade. Throughout this article, I will try to keep the econophysical nature of this model.

Suggested Citation

  • Luigi Capoani, 2023. "Review of the gravity model: origins and critical analysis of its theoretical development," SN Business & Economics, Springer, vol. 3(5), pages 1-43, May.
    • Handle: RePEc:spr:snbeco:v:3:y:2023:i:5:d:10.1007_s43546-023-00461-0
    DOI: 10.1007/s43546-023-00461-0
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    More about this item

    Keywords

    Gravity model; Econophysics; History of economics;
    All these keywords.

    JEL classification:

    • A12 - General Economics and Teaching - - General Economics - - - Relation of Economics to Other Disciplines
    • B27 - Schools of Economic Thought and Methodology - - History of Economic Thought since 1925 - - - International Trade and Finance
    • F10 - International Economics - - Trade - - - General

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