Australia’s external trade is relatively low compared with the size of its economy. Indeed, Australia’s openness ratio … understand Australia’s low openness by analysing the empirical determinants of aggregate country trade. We begin by estimating a … standard gravity model of bilateral trade. Although the model appears to fit the bilateral data very well, it does a relatively …

Obstfeld and Rogoff (2001) argue that trade costs provide at least part of the explanation for a number of puzzles in … trade costs are associated with correlations associated with three of these puzzles: the Feldstein-Horioka saving …

. Second, it shows that global trade in non-oil resource commodities can be described by the gravity model of trade. Using this …