gravity model

Definition

A model of the flows of bilateral trade based on analogy with the law of gravity in physics: Tij = AYiYj /Dij , where Tij is exports from country i to country j, Yi,Yj are their national incomes, Dij is the distance between them, and A is a constant. Other constants as exponents and other variables are often included. Due independently to Tinbergen (1962) and Pöyhönen (1963).

Use gravity model in a sentence

You should try to keep up with the gravity model and make sure you are using it to your advantage.

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The gravity model was paid attention to and all of the physicists present were arguing about it with each other.

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The gravity model helped show the correlation between different countries income and the trades that were coming from them as a model.

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