Eugster, Johannes L.; Jaumotte, Florence; MacDonald, Margaux - 2020
Based on an empirical gravity model of sectoral bilateral trade, we uncover three features of bilateral trade balances … unobservable bilateral trade costs. Second, the model fit improves drastically when we focus on changes over time of the balances …. Third, using a log linear approximation we show that changes in bilateral trade balances over the past two decades were …