Trade & Open Economy · intro
What moves on the Gravity Model of Trade diagram
Trade falls roughly in proportion to distance in the gravity model, geography remains a first-order force.
Read trade off the curve at your partner's distance.
Now court a partner three times farther away.
Expected flows fall steeply, the distance penalty has survived containers and the internet. Neighbors matter.
Examiners ask this as: distance cost trade, far market pivot.
Other scenarios on Gravity Model of Trade