Based on an empirical gravity model of sectoral bilateral trade, we uncover three features of bilateral trade balances. First, the difficulty of gravity models in fitting the observed level of ...

In principle, international trade flows according to the laws of gravity. In that sense, trade is determined by two factors: the Gross Domestic Products and the geographical distance between trading ...

One reason why countries service their external debts is the fear that default might lead to shrinkage of international trade. If so, then creditors should systematically lend more to countries with ...