Ministry awards grant of € 25,000 for workshop on ‘Tinbergen Model’

Prof. Steven Brakman of International Economics & Business has been awarded a grant of more than € 25,000 by the Ministry of Economic Affairs for a workshop on the application of the ‘gravity model’.

Brakman: ‘The model became well-known in the 1960s through the work of Jan Tinbergen. It is based on the fact that distance is a dominant factor in economics. Trade is inversely proportionate to distance. In other words, distance is a barrier to trade.’

The model became less influential in the 1970s and 1980s because it lacked theoretical justifications. But this is now changing, partly as a result of recent work by Robert Feenstra of the University of California, which shows that the model actually does have solid theoretical justifications. Professor of Globalization Steven Brakman explains: ‘The model is currently being applied in many contexts, in particular the “border effect”, which shows that the existence of national frontiers can have a very negative influence on the scale of trade, in theory as well as in practice. The workshop I will be organizing with Prof. P. van Bergeijk of the Ministry of Economic Affairs in the course of 2007 will deal with these recent developments.’

The workshop proceedings will be published in a single volume.