Bilateral Trade Boosts Asia's Economic Growth, Gravity Model Reveals
The scientists used a Bayesian approach to study how trade between countries in Asia can be adjusted. They found that factors like country size, distance between trading partners, and trade agreements affect trade. The study showed that when the GDP and area of destination countries increase, exports go up. This means that bigger and closer trading partners tend to trade more. They also determined that trade agreements influence both the creation and diversion of trade. By analyzing these factors, the research could predict how changes in GDP, population, exchange rates, and area of destination countries impact trade volumes in Asia. Ultimately, their findings suggest that by understanding these relationships, trade adjustments in Asia can be better managed.