The aim of this paper is to summarize the existing gravitational models applied in economics and estimate a bilateral relation between trade flows between countries (originated in Romania and having as destination Italy) and some of their macro-characteristics: GDP, population, geographic distance or remotness and infrastructural supplies (the model will be able to be extended to other pairs of countries, blocks of countries or even regions in future developments). However, the main motivation that guided our brief research is the importance of the comparative and competitive advantage of domestic economies. They represent important figures that help us understand the generic mainframe in international trade, especially when we study trade between single countries. Though, as theory suggests, they often represent powerless metrics in understanding the real world due to the fact that their underlying hypotheses are limited to constraints regarding factors endowments, factors prices, countries’ technology levels etc. (see Heckscher-Ohlin for detailed analysis). Therefore, we claim that it is in fact possible to find a link that explains the trade flows attraction forces between two countries, two economic blocks or two regions.
Competitiveness and Convergence – a Gravitational Modelfor the International Trade in Romania
SCORBUREANU, Alexandrina Ioana
2007-01-01
Abstract
The aim of this paper is to summarize the existing gravitational models applied in economics and estimate a bilateral relation between trade flows between countries (originated in Romania and having as destination Italy) and some of their macro-characteristics: GDP, population, geographic distance or remotness and infrastructural supplies (the model will be able to be extended to other pairs of countries, blocks of countries or even regions in future developments). However, the main motivation that guided our brief research is the importance of the comparative and competitive advantage of domestic economies. They represent important figures that help us understand the generic mainframe in international trade, especially when we study trade between single countries. Though, as theory suggests, they often represent powerless metrics in understanding the real world due to the fact that their underlying hypotheses are limited to constraints regarding factors endowments, factors prices, countries’ technology levels etc. (see Heckscher-Ohlin for detailed analysis). Therefore, we claim that it is in fact possible to find a link that explains the trade flows attraction forces between two countries, two economic blocks or two regions.
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