A key element missing from the structural gravity literature is a legitimate validation of theory. By design the reduced-form gravity equation is adept at predicting bilateral trade flows. To make inferences beyond trade flows, however, theoretic models should be consistent with other observable...

Borders affect the composition, not only the level, of interregional trade. In disaggregated U.S. Commodity Flow data, border effects vary substantially across commodities. Substantial border-induced compositional change suggests the possibility that standard estimates suffer from aggregation...