Editing Internationalization (section)

=== Gravity model of trade <small>''(Walter Isard, 1954)''</small> ===
{{Main|Gravity model of trade|Walter Isard}}
The gravity model of trade in [[international economics]], similar to other [[gravity model]]s in [[social science]], predicts bilateral trade flows based on the economic sizes of (often using [[GDP]] measurements) and distance between two units. The basic theoretical model for trade between two countries takes the form of:

:<math>F_{ij} = G \frac{M_i M_j}{D_{ij}}</math>

with:

:<math>F \,</math>: '''Trade flow'''

:<math>i, j \,</math>: '''Country i and j'''

:<math>M \,</math>: '''Economic mass''', for example GDP

:<math>D \,</math>: '''Distance'''

:<math>G \,</math>: '''Constant'''

The model has also been used in [[international relations]] to evaluate the impact of treaties and alliances on trade, and it has been used to test the effectiveness of trade agreements and organizations such as the [[North American Free Trade Agreement]] (NAFTA) and the [[World Trade Organization]] (WTO).