TY  - JOUR
AU  - Anderson,James E.
AU  - Yotov,Yoto V.
TI  - Gold Standard Gravity
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 17835
PY  - 2012
Y2  - February 2012
UR  - http://www.nber.org/papers/w17835
L1  - http://www.nber.org/papers/w17835.pdf
N1  - Author contact info:
James E. Anderson
Department of Economics
Boston College
Chestnut Hill, MA 02467
Tel: 617/552-3691
Fax: 617/552-2308
E-Mail: james.anderson.1@bc.edu

Yoto V. Yotov
Drexel University
LeBow College of Business
Department of Economics and International Business
Matheson Hall, Suite 503-C
Philadelphia, PA 19104
E-Mail: yotov@drexel.edu
AB  - This paper provides striking confirmation of the restrictions of the structural gravity model of trade. Structural forces predicted by theory explain 95% of the variation of the fixed effects used to control for them in the recent gravity literature, fixed effects that in principle could reflect other forces. This validation opens avenues to inferring unobserved sectoral activity and multilateral resistance variables by equating fixed effects with structural gravity counterparts. Our findings also provide important validation of a host of  general equilibrium comparative static exercises based on the structural gravity model.
ER  -