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Gravity Model of international Trade

Posted: Tue May 28, 2019 10:27 am
by GiMa
Hey there!
For my thesis I have to estimate a Gravity Model of international Trade. I use over 30 countries during the time of 1990-2017. I have variables which vary over time (GDP and Exports) and constant variables (distance) as well as constant and changing dummies. I transferred my Data in 3d panel form to EViews, but now I am lost how to estimate the model.
I tried: equation eq.ln @log(exports_ij) c @log(GDP_ij) @log(distance) @dummy
but it is not working.

Further my GDP data is in current USD and my Exports in thousand current USD, how can I adjust those values?


Thank you in advance!

Re: Gravity Model of international Trade

Posted: Tue May 28, 2019 10:34 am
by startz
I don't think @dummy is a function. Perhaps you were looking for @expand?

Re: Gravity Model of international Trade

Posted: Tue May 28, 2019 10:39 am
by GiMa
Thank you!

So it is: @log(exports_ij) c @log(GDP_j) @log(distance) @expand(dummy)?

Re: Gravity Model of international Trade

Posted: Tue May 28, 2019 10:42 am
by startz
Probably best to read the help documentation.

Re: Gravity Model of international Trade

Posted: Wed May 29, 2019 9:17 am
by GiMa
I did and I figured out an equation that is leading me to an output:
log(exports_ij) c log(gdp_i) log(gdp_j) log(distw) log(dist) log(distwces) log(distcap) combo cefta_new cefta_92 lang_off colony curcol col45 smctry

but somehow my cefta_new coefficient is negative (cefta_92 is positive) and my distance coefficient positive. I can't find a mistake in my data.

Re: Gravity Model of international Trade

Posted: Wed May 29, 2019 10:00 am
by startz
It doesn't look like you've included any dummies.

Re: Gravity Model of international Trade

Posted: Wed May 29, 2019 10:06 am
by GiMa
combo cefta_new cefta_92 lang_off colony curcol col45 smctry are the dummies

Re: Gravity Model of international Trade

Posted: Wed May 29, 2019 11:20 am
by startz
I don't know why you are getting that result. Perhaps someone who has estimated gravity models will have an insight. But you'll have to give clear definitions of all your variables.

Re: Gravity Model of international Trade

Posted: Thu May 30, 2019 12:25 pm
by GiMa
I checked my variables again and I am really desperate now. I'll attach my excell data.

I would be more than thankful if anyone could help me!

Re: Gravity Model of international Trade

Posted: Thu May 30, 2019 12:34 pm
by startz
No one knows what your variable names mean.