Gravity Models of the Intra-EU Trade: Application of the Hausman-Taylor Estimation in Heterogeneous Panels with Common Time-specific Factors

In this paper we follow recent developments of panel data studies and explicitly allow for the existence of unobserved common time-specific factors where their individual responses are also allowed to be heterogeneous across cross section units. In the context of this extended panel data framework we generalize the Hausman-Taylor estimation methodology and develop the associated econometric theory. We apply our proposed estimation technique along with the conventional panel data approaches to a comprehensive analysis of the gravity equation of bilateral trade flows amongst the 15 European countries over 1960-2001. Empirical results clearly demonstrate that our proposed approach fits the data reasonably well and provides much more sensible results than the conventional approach based on the fixed time dummies. These findings may highlight the importance of allowing for a certain degree of cross section dependence through unobserved heterogeneous time specific common effects, otherwise the resulting estimates would be severely biased.Gravity Models of Trade, Heterogeneous Panel Data, Hausman-Taylor Estimation, Time-specific Common Factors, Intra-EU Trade.

Lineal gravity from planar gravity

We show how to obtain the two-dimensional black hole action by dimensional reduction of the three-dimensional Einstein action with a non-zero cosmological constant. Starting from the Chern-Simons formulation of 2+1 gravity, we obtain the 1+1 dimensional gauge formulation given by Verlinde. Remarkably, the proposed reduction shares the relevant features of the formulation of Cangemi and Jackiw, without the need for a central charge in the algebra. We show how the Lagrange multipliersin these formulations appear naturally as the remnants of the three dimensional connection associated to symmetries that have been lostin the dimensional reduction. The proposed dimensional reduction involves a shift in the three dimensional connection whose effect is to make the length of the extra dimension infinite.Comment: 13 pages, plain Te

Stochastic Gravity: Beyond Semiclassical Gravity

The back-reaction of a classical gravitational field interacting with quantum matter fields is described by the semiclassical Einstein equation, which has the expectation value of the quantum matter fields stress tensor as a source. The semiclassical theory may be obtained from the quantum field theory of gravity interacting with N matter fields in the large N limit. This theory breaks down when the fields quantum fluctuations are important. Stochastic gravity goes beyond the semiclassical limit and allows for a systematic and self-consistent description of the metric fluctuations induced by these quantum fluctuations. The correlation functions of the metric fluctuations obtained in stochastic gravity reproduce the correlation functions in the quantum theory to leading order in an 1/N expansion. Two main applications of stochastic gravity are discussed. The first, in cosmology, to obtain the spectrum of primordial metric perturbations induced by the inflaton fluctuations, even beyond the linear approximation. The second, in black hole physics, to study the fluctuations of the horizon of an evaporating black hole.Comment: 12 pages, no figures, proceedings of the XXIX Spanish Relativity Meetin

Dilaton Gravity with a Non-minmally Coupled Scalar Field

We discuss the two-dimensional dilaton gravity with a scalar field as the source matter. The coupling between the gravity and the scalar, massless, field is presented in an unusual form. We work out two examples of these couplings and solutions with black-hole behaviour are discussed and compared with those found in the literature

On Classical Equivalence Between Noncritical and Einstein Gravity : The AdS/CFT Perspectives

We find that noncritical gravity, a special class of higher derivative gravity, is classically equivalent to Einstein gravity at the full nonlinear level. We obtain the viscosity-to-entropy ratio and the second order transport coefficients of the dual fluid of noncritical gravity to all orders in the coupling of higher derivative terms. We also compute the holographic entanglement entropy in the dual CFT of noncritical gravity. All these results confirm the nonlinear equivalence between noncritical gravity and Einstein gravity at the classical level.Comment: 19 pages, no figure

Is nonrelativistic gravity possible?

We study nonrelativistic gravity using the Hamiltonian formalism. For the dynamics of general relativity (relativistic gravity) the formalism is well known and called the Arnowitt-Deser-Misner (ADM) formalism. We show that if the lapse function is constrained correctly, then nonrelativistic gravity is described by a consistent Hamiltonian system. Surprisingly, nonrelativistic gravity can have solutions identical to relativistic gravity ones. In particular, (anti-)de Sitter black holes of Einstein gravity and IR limit of Horava gravity are locally identical.Comment: 4 pages, v2, typos corrected, published in Physical Review