We derive a real gravity equation and gain several new insights that were hidden in the nominal specification used so far. Most importantly, the real effective exchange rate (REER) of the exporter and, via the importer's terms of trade, also the importer's REER matter, and we can identify the...

"This volume is a collection of the author's scholarly work spanning a quarter century of inquiry into the causes of international business cycles. It starts with an introduction to international business cycle research. Part I reviews salient business cycle facts relating to quantities, prices...