The Gravity Model
The gravity model in economics was until relatively recently an intellectual orphan, unconnected to the rich family of economic theory. This review is a tale of the orphan's reunion with its heritage and the benefits that have flowed from it. Gravity has long been one of the most successful empirical models in economics. Incorporating the theoretical foundations of gravity into recent practice has led to a richer and more accurate estimation and interpretation of the spatial relations described by gravity. Recent developments are reviewed here and suggestions are made for promising future research.
I thank Jeffrey H. Bergstrand, Keith Head, J. Peter Neary and Yoto V. Yotov for helpful comments. The views expressed herein are those of the author and do not necessarily reflect the views of the National Bureau of Economic Research.