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The gravity model has long been used for modelling and predicting trade flows. This paper generalises the gravity model allowing for proper representation of local and target country effects and also the business cycle. The new approach is based on a panel data framework (instead of a simple...
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the export volume, the gravity model adopts the product of the GDPs of two trading counties, their bilateral exchange rate …, and the depreciation rate of the exporting country's currency value is dded. In addition, considering that the export …
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of the dependent variable (export) around its mean, and in terms of the accuracy of predictions. …
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