Gravity, Trade Agreements, and Policy: Celebrating the Contributions of Jeff Bergstrand

Kellogg Faculty Fellow Jeff Bergstrand is a professor in the Department of Finance and a concurrent professor in the Department of Economics who is retiring at the end of the 2023-24 academic year. He joined the faculty of Notre Dame in 1986 and has been a Kellogg Faculty Fellow since 1999. He served on Kellogg's Faculty Committee from 2001 to 2005 and then continuously from 2007 to the present. He was the acting director of Kellogg during the spring semester of 2018. He originated the idea of the Policy and Practice Research Labs at Kellogg and has had a Kellogg-funded lab (the Initiative on International Economic Integration Lab) since 2019.

Jeff has generously given of his time to help mentor undergraduate and PhD students in the economics program, alongside his having taught approximately 10,000 students in the Mendoza College of Business. He has been a regular participant in international economics seminars and he plans to be active in research for the foreseeable future, even in retirement. In fact, he is currently working with Kellogg Distinguished Research Affiliate Jordi Paniagua and the US International Trade Commission (USITC) on developing a data set on multinational capital flows that will be available to scholars on the USITC web page. 

Jeff Bergstrand's work is considered pioneering in the field of international trade. In particular, Jeff has contributed to the theoretical and empirical applications of the gravity model of international trade, which is considered the workhorse model of international trade. Nearly every theoretical model that describes trade between pairs of countries leads to a gravity-like empirical specification. Jeff was instrumental in developing an intuitive model of trade and providing a theoretical justification for the gravity equation. His work has inspired trade economists over the last 40 years. He has co-authors from across the world and has over 21,000 Google Scholar citations, including over 7000 citations since 2018. According to RePEc (a decentralized database of working papers, publications, and software contributions that also provides scholar rankings), Jeff is among the top 2% of economists worldwide and among the top 1% of trade economists. 

Beginning in the late 1980s and early 1990s, it became apparent that progress on multilateral trade liberalization through the General Agreement on Tariffs and Trade (GATT) and the World Trade Organization (WTO) was becoming increasingly difficult. As a result, countries began pursuing regional free trade agreements. Jeff Bergstrand’s research was at the frontier of analyzing the impact of these agreements. In his paper on the “Economic Determinants of Free Trade Agreements” he provided a stylized model explaining the factors that would likely influence countries to enter into a free trade agreement. Jeff and his co-author showed that their theoretical model could, based solely on economic characteristics, predict 85% of the countries that had free trade agreements and 97% of the countries that did not have a free trade agreement. This paper has 977 Google Scholar citations.

Jeff followed up this paper with perhaps the most influential empirical paper on free trade agreements. The paper “Do Free Trade Agreements Actually Increase Members’ International Trade” showed, roughly speaking, that a free trade agreement leads to a doubling of bilateral trade. Prior to the publication of this paper, most papers that tried to assess the efficacy of free trade agreements found mixed results. Bergstrand and his coauthor argued that most of the previous empirical models were mis-specified and after making the correction they found that free trade agreements increased trade. This paper has been cited 3,421 times. Almost all researchers who investigate the effects of trade agreements apply the approach Jeff developed in this paper. Jeff has followed up on these two papers with more than a dozen papers analyzing this field of study and the heterogeneous impacts of trade agreements.

Moreover, as a outcome of a National Science Foundation grant, Jeff maintains a comprehensive data set on all free trade agreements by type of arrangements with links to the text of the agreements. As a result of his work, Jeff has consulted with the USITC and has been invited to the White House to discuss US trade policy. His work is frequently referenced in the annual Economic Report of the President in the chapter on international issues. And, the influence of his work extends beyond the United States. Jeff has worked with the Swiss government and the European Economic Union. Moreover, his approach to modeling trade agreements is applied within government agencies by most countries, developed and developing alike.

Every year, there are several workshops that are devoted to the development and application of the gravity model of trade. Last year, there were several conferences that focused on the Gravity Equation. In December, the Austrian Institute of Economic Research (WIFO) hosted a conference titled Gravity at 60 which brought together some of the most accomplished researchers in international trade. At this conference, Bergstrand's work was by far the most heavily cited.

The interest in Jeff's work extends beyond academia. Every year there are several workshops devoted to using the Gravity Equation for policy analysis. These workshops are designed for people involved in public policy to assess the impacts of trade agreements, tariffs, or other policies that can affect countries. A short list of the workshops from last year include: Deep Trade Agreements Measurement and Impacts (Notre Dame), Gravity Master Class (The Hague, Netherlands), the Structural Gravity Model and its Application to Economics Sanctions (the Australian National University). Finally, Bergstrand’s work has been used by the Executive Office of the President of the United States and the Congressional Budget Office to evaluate the impact of US trade agreements. 

All academic sessions will take place in the Hesburgh Center Auditorium

Thursday, April 4

5:00-7:00 pm Reception 
 Morris Inn at Rohr's Bistro

Friday, April 5

8:30 am Welcome Remarks
• John McGreevy, Charles and Jill Fischer Provost and Francis A. McAnaney Professor of History
• Joseph Kaboski, David F. and Erin M. Seng Foundation Professor, on behalf of the Kellogg Institute for International Studies
• Eric Sims, Department Chair and Michael P. Grace II Collegiate Chair, Department of Economics
• K.J. Martijn Cremers, Martin J. Gillen Dean of the Mendoza College of Business and Bernard J. Hank Professor of Finance

9:00 - 10:30 am Session I
• "Quantile Gravity: Economic Integration Agreements, Least Traded Goods, and Least Developed Economies," Matthew Clance, University of Pretoria
• "Deep Trade Agreements' Provisions, International Trade, and Foreign Direct Investment," Jordi Paniagua, University of Valencia; Kellogg Distinguished Research Affiliate
• "An Import(ant) Price of Brexit Uncertainty," Nuno Limao, University of Maryland

10:30 - 10:45 am Break

10:45 am - 12:15 pm Session II
• "The Effects of Multiple Endogenous PTAs on Bilateral Trade: An Empirical Framework," Peter Egger, ETH
• "The Impacts of Intellectual Property–Related Preferential Trade Agreements on Bilateral Patent Applications," Keith Maskus, University of Colorado
• "Gravitational Pull: Theory-Based Recommendations for Estimating the Gravity Model of Trade," Mario Larch, University of Bayreuth

12:15 - 1:30 pm Lunch
Morris Inn Private Dining Room

1:30 - 3:00 pm Session III
• "Commercial Rivalry and Seller Incidence Shifting: Non-parametric Accounting of the China Shock," James Anderson, Boston College
• "Demogravity, Income and Trade in the 21st Century: A Long-Run Perspective," Tristan Kohl, University of Groningen
• "Economic Integration Agreements and the Movement of Goods and Labor," Scott Baier and Ward Reesman, Clemson University

3:00 - 3:30 pm Break

3:30 - 5:00 pm Session IV
• "Cross-border Patenting, Globalization, and Development," Inmaculada Martinez-Zarzoso, University of Göttingen and University Jaume I 
• "On Theory and Empirics of Multinational Firms,"  James Markusen, University of Colorado
• "Optimal Unilateral Carbon Policy," Sam Kortum, Yale University

5:00 - 5:15 pm Break

5:15 - 6:15 pm  A Panel Discussion of the Effects of Jeffrey Bergstrand’s Research on Trade Policy
• Robert Johnson, University of Notre Dame (Moderator)
• Saad Ahmad, US International Trade Commission
• Scott Baier, Clemson University
• Peter Egger, ETH

6:30 - 7:30 pm Reception supported by the Mendoza College of Business
Hesburgh Center Great Hall

Saturday, April 6

9:00 - 10:30 am Session V
• "High Frequency Gravity," Dennis Novy, University of Warwick
• "Bootstrap for Gravity Models," Thomas Zylkin, University of Richmond
• "European Immigrants and the United States’ Rise to the Technological Frontier," Costas Arkolakis, Yale University

10:30 - 10:45 am Break

10:45 am - 12:15 pm Session VI
• "Equilibrium Trade Regimes: Power- vs. Rules-Based," Emanuel Ornelas, Sao Paulo School of Economics - FGV
• "Contesting an International Environmental Agreement," Mathew Cole, California Polytechnic State University
• "International Patent Families: Where and When to Patent," Eric Bond, Vanderbilt University

12:15pm  Lunch
Hesburgh Center Great Hall

The Notre Dame community should register to attend the conference using this form.

If you are not a part of the University of Notre Dame campus community and would like to attend the conference, please contact faculty conference organizer Thomas Gresik.

Listing of local restaurants

The Morris Inn at the University of Notre Dame

1399 North Notre Dame Avenue
Notre Dame, Indiana 46556
Telephone (574) 631-2000
Website

• The Morris Inn is located on the Notre Dame campus and is a short distance from the conference venue.
• Room rate: $237.00 per night, per person, including taxes. The rate is guaranteed through March 4 and also based on room availability.
• We have a limited number of rooms available.  If you would like to stay at the Morris Inn, please contact staff conference organizer Therese Hanlon for more information.

The Ivy Court

1404 Ivy Court
South Bend, Indiana 46635
Telephone (574) 277-6500 or 1-888-325-2647
Website

• The Ivy Court is located on the edge of campus and is within walking distance from the conference venue.
• Room rate: $129.00 per night, per person, including taxes. The rate is guaranteed through March 4 and also based on room availability.
• To reserve a room at the conference rate, please call the hotel property directly and reference the room block "Kellogg Institute."

The Inn at Saint Mary's

53993 State Road 933
South Bend, Indiana 46637
Telephone (574) 232-4000
Website

• The Inn at Saint Mary’s is located on the edge of campus and has a shuttle service available for those who prefer not to walk to the conference venue.
• Room rate: $158.00 per night per person, including taxes.  The rate is guaranteed through March 4 and also based on room availability.
• To reserve a room at the conference rate, please call the hotel property directly and reference the room block "Kellogg Institute."

The Hilton Garden Inn

53995 Indiana State Route 933
South Bend, Indiana 46637
telephone (574) 232-7700
Website

• The Hilton Garden Inn is located on the edge of campus (next to the Inn at Saint Mary’s)  and has a shuttle service available for those who prefer not to walk to the conference venue.
• Room rate: $158.00 per night per person, including taxes.  The rate is guaranteed through March 4 and also based on room availability.
• To reserve a room at the conference rate, please call the hotel property directly and reference the room block "Kellogg Institute."