Handbook of International Trade and Transportation
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Handbook of International Trade and Transportation

Edited by Bruce A. Blonigen and Wesley W. Wilson

International trade has grown rapidly over the past half century, accommodated by the transportation industry through concomitant growth and technological change. But while the connection between transport and trade flows is clear, the academic literature often looks at these two issues separately. This Handbook is unique in pulling together the key insights of each field while highlighting what we know about their intersection and ideas for future research in this relatively unexamined but growing area of study.
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Chapter 2: Gravity, distance, and international trade

Scott L. Baier, Amanda Kerr and Yoto V. Yotov

Abstract

The authors review and interpret the main theoretical developments in the gravity literature from its very early, a-theoretical applications to the latest structural contributions. They also discuss challenges and implement methods to estimate empirical gravity equations. They finish with a presentation and examples of numerical simulations with the structural gravity model. Throughout the analysis they attempt to emphasize the links and importance of transportation costs for the trade literature, and outline avenues where they believe interdisciplinary contributions between the international trade and transportation economics fields will be most valuable.

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