Most researchers used gravity model to analyse bilateral trade, am working on a research which involves analysing multilateral trade. What models or simulations can I use.
Dear Emmanuel,
The problem with modeling international trade is to take into consideration what all the countries will do at the same time. This can be done well in a general equilibrium setting as apposed to a partial equilibrium setting. The WTO and the US International Trade Council (ITC) usually follow the general equilibrium approach. They simulate the data of each countries to fit well specification of known economic theories such as production and consumption, and then consider their trading possibilities with protection, tariffs, and liberalization policies. Check the ITC site for data and methods. Check the Penn World Tables site for the same. The GTAP site has software and data for sample and professional analysis.
Good luck in your research.
the model of gravity can be used in both bilateral analysis,i have a paper in this subject" the gravity model of trade applied case Jordanian trade 1976-2013. i have used bilateral and multilateral analysis.
It depends on the other objectives of research also . Partial equilibrium and general equilibrium model can be done , but gravity model will take into account on non- economic factors also .
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