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ge_gravity2: a command for solving universal gravity models

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  • Rodolfo G. Campos
  • Iliana Reggio
  • Jacopo Timini

Abstract

We describe an algorithm for computing counterfactual trade flows, prices, output, and welfare in a large class of general equilibrium trade models. We introduce a command called ge_gravity2 that allows users to perform these computations in Stata. This command extends the existing ge_gravity command by allowing users to compute the general equilibrium effects of changes in trade policy in positive supply elasticity models. It can be used to solve any model that falls into the class of universal gravity models as defined by Allen, Arkolakis, and Takahashi [Universal Gravity, Journal of Political Economy, 128(2), 2020, 393-433].

Suggested Citation

  • Rodolfo G. Campos & Iliana Reggio & Jacopo Timini, 2024. "ge_gravity2: a command for solving universal gravity models," Papers 2404.09180, arXiv.org, revised Apr 2024.
    • Handle: RePEc:arx:papers:2404.09180
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    References listed on IDEAS

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