Are Bilateral Trade Balances Irrelevant?

Based on an empirical gravity model of sectoral bilateral trade, we uncover three features of bilateral trade balances. First, the difficulty of gravity models in fitting the observed level of bilateral balances is likely due to the presence of unobservable bilateral trade costs. Second, the model fit improves drastically when we focus on... READ MORE...

Publication date: September 2020
ISBN 9781513557793

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Publication date: September 2020