Gravity Redux: Estimation of gravity-equation coefficients, elasticities of substitution, and general equilibrium comparative statics under asymmetric bilateral trade costs

► We formulate a structural gravity equation based upon a Krugman-type trade model. ► The elasticity of substitution can be estimated without ad valorem trade-cost data. ► We implement the model with empirical data and using Monte Carlo simulations. ► We estimate unbiased and precise coefficients, elasticities, and comparative statics.