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Title: 

Gravity Models of Trade: Unobserved Heterogeneity and Endogeneity

Authors: Chan, Felix
Harris, Mark N.
Greene, William
Kónya, László
Keywords: gravity models; unobserved heterogeneity;;Generalised Method of Moments
Issue Date: 19-Mar-2014
Abstract: We consider the estimation of the usual Gravity model of trade, which involves flows of trade, say exports, from country i to country j in time period t. We suggest an easy-to-implement generalised method of moments estimator that avoids the issues associated with the usual fixed effects treatment of the unobserved heterogeneity in this type of models and at the same time provides consistent parameter estimates in the face of potentially endogenous covariates.
URI: http://hdl.handle.net/2451/33571
Rights: Copyright Felix Chan, Mark N. Harris, William Greene, and László Kónya, 2014.
Appears in Collections:Economics Working Papers

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