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Does the gravity model of trade apply equally for goods and services?

Naively it would seem that the more ephemeral services would be less impacted by it?

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  • $\begingroup$ Apply equally in what sense? Are the model parameters the same? Or allowing the parameters to vary, is the variation equally explained in services as in goods? $\endgroup$ – BKay Jun 21 at 15:04
  • $\begingroup$ Neither (I think). I’d like to know whether there is a quantitative difference in impact when the model is applied to each. $\endgroup$ – Ben Jun 21 at 15:40
  • $\begingroup$ What do you mean by impact? $\endgroup$ – BKay Jun 21 at 15:43
  • $\begingroup$ Effect on bilateral trade flows. $\endgroup$ – Ben Jun 21 at 16:26

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