ge_gravity2: a command for solving universal gravity models

2024/04/14 by Rodolfo G. Campos, Campos, Rodolfo G., Iliana Reggio +3
Economics, Econometrics and Finance · #Complex Systems and Time Series Analysis #Economic Theory and Policy #Economic theories and models #FOS: Economics and business #General Economics (econ.GN)

paper · pdf · doi:10.48550/arxiv.2404.09180

openalex publication_date 2024/04/14 · openalex created_date 2025/10/10 · openalex updated_date 2026/07/28

Abstract

We describe an algorithm for computing counterfactual trade flows, prices, output, and welfare in a large class of general equilibrium trade models. We introduce a command called ge_gravity2 that allows users to perform these computations in Stata. This command extends the existing ge_gravity command by allowing users to compute the general equilibrium effects of changes in trade policy in positive supply elasticity models. It can be used to solve any model that falls into the class of universal gravity models as defined by Allen, Arkolakis, and Takahashi [Universal Gravity, Journal of Political Economy, 128(2), 2020, 393-433].

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