(a) 'Over the past few decades, East Asian economies have increased their share

of world GDP. Similarly, intra-Asian trade, that is the trade between East Asian nations

has grown as a share of world trade. More than that, East Asian countries have an

increasing share of their trade with each other'. Explain why, using the gravity model.

(b) The gravity model is often used to not only explain trade between two countries

but also to investigate the reason why they don't. Illustrate this anomaly with suitable

examples and reasons.