  Globalization is one of the central concepts of our age. The common
perception of the process is that, due to declining communication and transport
costs, distance becomes less and less important. However, the distance
coefficient in the gravity model of trade, which grows in time, indicates that
the role of distance increases rather than decreases. This, in essence,
captures the notion of the globalization puzzle. Here, we show that the
fractality of the international trade system (ITS) provides a simple solution
for the puzzle. We argue, that the distance coefficient corresponds to the
fractal dimension of ITS. We provide two independent methods, box counting
method and spatial choice model, which confirm this statement. Our results
allow us to conclude that the previous approaches to solving the puzzle
misinterpreted the meaning of the distance coefficient in the gravity model of
trade.
