Evaluating Regional Trade of the CIS Countries with a Gravity Model

<p>The gravity equation in international trade is one of the most robust empirical finding in economics that predicts bilateral <u>trade flows</u>&nbsp;based on the economic sizes and distance between two units. In this paper, I investigate whether the gravity model can explain the statistical properties of the regional Trade of the CIS countries. The goal of the research will be achieved by using theoretical and empirical methods. Theoretical part is based on analyzing and structuring literature sources and theories. The main method, which will be proposed in practical, is an econometrical model that will include bilateral trade between two countries as a dependent variable and respective sizes, measured by their GDP, the geographic distance between them and socio-economic factors as explanatory variables. It could be predicted that bilateral trade between two countries is proportional to their respective sizes, measured by their GDP, and inversely proportional to the geographic distance between them, but it is necessary to take into consideration how it will be influence other indicators.&nbsp;</p>