If sectoral trade flows obey structural gravity, countries' bilateral trade imbalances are the result of macro trade imbalances, “triangular trade”, or pairwise asymmetric trade barriers. Using data ...

Soon after that, trade flow plummeted. “When the tariffs hit a certain level, it effectively shuts the border for the flow of the goods,” Mr. Kilpatrick said.

Despite the gravity equations' empirical successes in "explaining" trade flows, the model's predictive potential has been inhibited by an absence of strong theoretical foundations. A general ...