Martínez-Zarzoso, Inmaculada; Nowak-Lehmann, Felicitas - 2004
This paper applies the gravity trade model to assess Mercosur-European Union trade, and trade potential following the … that the fixed effect model is to be preferred to the random effects gravity model. Furthermore, a number of variables …, namely, infrastructure, income differences and exchange rates added to the standard gravity equation, are found to be …