Dynamic Gravity and International Inequality

Abstract

After modifying and extending the Olivero and Yotov (2012) dynamic gravity model, I derive key novel theoretical findings: the balance condition and the barrier-flow dynamic gravity relationship. The balance condition shows that growth of a country’s market share and trade ease puts downward pressure on the market share and trade ease of other countries, highlighting the link between international inequality and trade frictions. The barrier-flow dynamic gravity relationship shows that relative trade flows growth rate is inversely proportional to relative trade barriers growth rate.

Keywords: Trade; Gravity; Inequality; Dynamic

Received Date: February 22, 2026

Accepted Date: March 14, 2026

Published Date: April 02, 2026

Available Online at: https://www.ijsrisjournal.com/index.php/ojsfiles/article/view/624