Abstract

Two theoretical models are tested to see which one provides the better explanation of trade flows between the census regions of the United States. The Gravity-Flow model suggests that trade flows are positively affected by the size of the trading region and inversely affected by the distance between the two regions. In contrast, the Heckscher-Ohlin model predicts that trade flows are determined by regional factor endowments and commodities' factor intensity. It predicts that regions will tend to export those commodities that are intensive in its abundant factors.

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