Lorentzian Geometry and Gravity Models of Trade

Kweku Opoku-Agyemang

Working Paper Class 34

We explore the implications of Lorentzian geometry, the mathematical framework for studying spacetime, for the economics of trade. We extend the gravity model of trade, which is based on the analogy between the gravitational force between two masses and the trade flow between two regions, to incorporate the effects of spacetime curvature and relative motion. We focus on a specific application of this framework to the trade between two cities located at different altitudes on Earth, which causes a measurable time dilation and length contraction due to the rotation of the Earth. We show that these effects require the traders to adjust their clocks and rulers according to the theory of relativity, or to use a common standard of time and distance that is independent of their locations. We discuss the potential benefits and costs of this adjustment, as well as the implications for trade policy and international agreements. We also suggest some directions for future research on Lorentzian gravity trade models.

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Opoku-Agyemang, Kweku A. (2024). "Lorentzian Geometry and Gravity Models of Trade." Machine Learning X Doing Working Paper Class 34. Machine Learning X Doing.

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