#1999-010E "Controlling for Heterogeneity in Gravity Models of Trade and Integration"
by I-Hui Cheng, and Howard J. Wall

Revised July 2004

This paper compares various specifications of the gravity model of trade as nested versions of a general specification that uses bilateral country-pair fixed effects to control for heterogeneity. For each specification, we show that the atheoretical restrictions to obtain them from the general model are not supported statistically. More...

PUBLISHED: Federal Reserve Bank of St. Louis Review, January/February 2005, 87(1), pp. 49-64