John Marc Palanca

BSBA 3rd yr MM

The gravity model is often used to not only explain trade between two countries, but also to
investigate the reasons why they don’t. Illustrate this anomaly with suitable examples and
reasons.

- The gravity model of international trade countries that the volume of trade between two
countries is commensurable to their profitable mass and a measure of their relative trade
conflicts. Maybe because of its intuitive appeal, the gravity model has been the idler
model of international trade for further than 50 times. The gravity model of global
commerce has been criticized for ignoring comparative advantage. This criticism is
crucial when using the gravity model for political purposes, such as determining priority
markets for trade promotion initiatives.

Ireland and Belgium have a very similar trading patterns. Both trade considerably with the
United States than with the European Union, even though they are EU members and closer to EU
common market than the American market. Explain this anomaly using gravity model.

- In the given situation, Ireland’s trade with the United States lies in the artistic affections
because the same language is spoken and there area large number of Irish emigrants in
the United States. Ireland also hosts numerous US- grounded pots. Traditionally, Belgium
has been the point of entry to important of north western Europe’s trade with the United
States; also, Antwerp in Belgium ranks as the alternate most important harborage in
Europe, as measured by the heftiness handled. therefore, the large trade suggests that
transport costs and terrain are important factors in explaining Belgium’s volume of trade
with the United States.
- A century ago, most British
imports came from relatively
distant locations: North
- America, Latin America, and
Asia. Today, most British
imports come from other
- European countries. How
does this fit in with the
changing types of goods that
make up
- world trade?
- A century ago, most British
imports came from relatively
distant locations: North
- America, Latin America, and
Asia. Today, most British
imports come from other
- European countries. How
does this fit in with the
changing types of goods that
make up
- world trade?
- A century ago, most British
imports came from relatively
distant locations: North
- America, Latin America, and
Asia. Today, most British
imports come from other
 - European countries. How
does this fit in with the
changing types of goods that
make up
- world trade?
A century ago, most British imports came from relatively distant locations: North America, Latin
America, and Asia. Today, most British imports come from other European countries. How does
this fit in with the changing types of goods that make up world trade?

- As the chapter discusses, a century ago much of world trade was in goods, which were in
numerous ways climate or terrain determined. therefore, the United Kingdom imported
goods that it couldn't make itself. This meant importing effects like cotton or rubber from
countries in the Western Semicircle or Asia. As the United Kingdom’s climate and
natural resource endowments were fairly analogous to those of the rest of Europe, it had
lower of a need to import from other European countries. In the fate of the Industrial
Revolution, where manufacturing trade accelerated and has continued to expand with
advancements in transportation and dispatches, it isn't surprising that the United
Kingdom would turn more to the near and large husbandry in Europe for important of its
trade. This result is a direct prediction of the gravity model.

Reflection

I understand that after accounting for potential trade-affecting variables, the gravity model of
international commerce predicts that the flow of commodities between two places is inversely
correlated with their distance and inversely correlated with their size or income levels.

I realized that the mainstay of the literature on applied international trade is the gravity model.
Thousands of research papers and published articles covering all facets of trade have used it. The
ability to assess the trade effects of different trade-related policies, from conventional tariffs to
novel "behind-the-border" measures, makes it of particular interest to policy experts.