Professor’s paper named as classic in Economics
Professor João Santos Silva, Head of the School of Economics, has had his paper ‘The Log of Gravity’ (with Silvana Tenreyro) acknowledged as a classic paper in Economics.
The paper, published in 2006 in the Review of Economics and Statistics, has the most citations of any Economics paper published in that year, an important marker of its influence.
This paper shows that the methods used for over 50 years to estimate models for international trade, and to evaluate policies such as free trade agreements and currency unions, were invalid and potentially led to very misleading results.
The authors proposed an alternative estimation approach, which is valid under very general conditions and is very simple to implement. This new method is now widely used in academic research on international trade, and has also been adopted by leading institutions such as the World Trade Organization and the World Bank.