A gravity model of trade for Argentina 2004-2017

Abstract

This paper estimates a gravity model for Argentina during the period 2004-2017. Two versions were used: one using pooled ordinary least squares and another with fixed effects. The main results for the first model are as follows. On the one hand, income and the real exchange rate have the correct signs and are statistically significant. On the other hand, population and distance have negative effects, which is somewhat less known in the analysis of income and price elasticities. Regarding the second model, the results were not satisfactory. The income of trading partners, the real exchange rate, and population were not statistically significant, which contradicts economic theory.