This discussion paper, authored by Keith Head and Thierry Mayer, focuses on the estimation and interpretation of gravity equations for bilateral trade. The authors emphasize the importance of a careful consideration of the theoretical underpinnings to avoid biased and misinterpreted results. They advocate a toolkit approach, using multiple estimation methods to ensure robustness. The paper covers the historical development of gravity equations, from their initial skepticism to their current status as a core tool in international trade research. It also discusses various microfoundations for gravity equations, including demand-side and supply-side models, and explores the implications of these models for policy impacts and welfare changes. The authors provide a step-by-step guide to applying best-practice methods for estimating gravity equations, highlighting the importance of considering both theoretical consistency and empirical robustness.This discussion paper, authored by Keith Head and Thierry Mayer, focuses on the estimation and interpretation of gravity equations for bilateral trade. The authors emphasize the importance of a careful consideration of the theoretical underpinnings to avoid biased and misinterpreted results. They advocate a toolkit approach, using multiple estimation methods to ensure robustness. The paper covers the historical development of gravity equations, from their initial skepticism to their current status as a core tool in international trade research. It also discusses various microfoundations for gravity equations, including demand-side and supply-side models, and explores the implications of these models for policy impacts and welfare changes. The authors provide a step-by-step guide to applying best-practice methods for estimating gravity equations, highlighting the importance of considering both theoretical consistency and empirical robustness.