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We provide a theoretical interpretation of two features of international data: the countercyclical movements in net exports and the tendency for the trade balance to be negatively correlated with current and future movements in the terms of trade, but positively correlated with past movements. We document these same properties in a two-country stochastic growth model in which trade fluctuations reflect, in large part, the dynamics of capital formation. We find that the general equilibrium perspective is essential: The relation between the trade balance and the terms of trade depends critically on the source of fluctuations.
We document the main cyclical features of the trade balance and the terms of trade in European Union as a whole and in the four "Cohesion Countries", in particular. S-curve describes also well the dynamic effect of terms of trade on the trade balance in these set of countries. We use the Backus, Kehoe and Kydland (1994) model to replicate the empirical data. We show that only one variable in the model is robust to cross-country differences: the trade balance.
Develops a set of frequency domain diagnostic tests for evaluating the dynamic properties of nonlinear general equilibrium rational expectations models that are commonly employed in business cycle research.
We document the main cyclical features of the trade balance and the terms of trade in European Union as a whole and in the four "Cohesion Countries", in particular. S-curve describes also well the dynamic effect of terms of trade on the trade balance in these set of countries. We use the Backus, Kehoe and Kydland (1994) model to replicate the empirical data. We show that only one variable in the model is robust to cross-country differences: the trade balance.
This paper provides a numerical analysis of an intertemporal equilibrium model of a small open, barter economy that is subject to random shocks affecting endowments, the terms of trade, and the real interest rate. Equilibrium stochastic processes for macroeconomic aggregates are computed and their properties are compared with observed stylized facts. The model mimics the Harberger-Laursen-Metzler effect, but cannot account for a countercyclical trade balance, the variability of the real exchange rate, and the income elasticity of imports. The results also show that the correlation between the trade balance and the terms of trade, given incomplete insurance markets, is sensitive to changes in preference parameters and in the persistence of exogenous shocks.
A dynamic stochastic equilibrium model of a small open economy is used to quantify the macroeconomic effects of introducing capital controls to stabilize the balance of trade. This model focuses on the role of international trade and foreign debt as instruments that help smooth consumption in response to productivity or terms-of-trade disturbances. The model rationalizes some key empirical regularities that characterize business fluctuations and the dynamics of savings and investment in post-war Canada. The results show that capital controls have small effects on both the basic characteristics of macroeconomic fluctuations and the level of welfare. A fiscal strategy that successfully enforces capital controls by introducing taxes on foreign interest income is also studied in some detail.
This volume originated in a course of lectures which the author originally gave at the Universitu lnternationale de Sciences Comparues at Luxembourg. The book appeared under the title of the course, and followed the same pattern. In the course of revisions the analysis has been carried a little further than it was originally presented, and many details have been added to its algebraic parts. In spite of these amplifications, however, the text remains on the level of elementary economics, and may be recommended to students whose interest in the subject is ahead of their technical background. Ozga provides an intelligible theoretical outline of the rate of exchange, the terms of trade, and the balance of trade that brings into focus the complementarity of various widely used models. Simple supply and demand relations are developed to establish a link between the classical and Keynesian approaches and between the partial and the general equilibrium methods; and the emphasis is always on clarifying the part that the relations considered in individual models would actually play in a more comprehensive system. Requiring some familiarity with economic theory but no previous training in mathematics, this simple and concise volume is exceptionally well suited to courses on the macro-theory of international trade and is useful reading for all courses in macroeconomics.
In international workshops on?New Worlds in Astroparticle Physics? held biannually, astronomers, astrophysicists and particle physicists discuss recent developments in the exciting and rapidly developing field of Astroparticle Physics. Similar to previous workshops, this 5th international workshop introduced experimental, observational and theoretical subjects through review lectures. This was followed by shorter contributions on the recent developments in Astroparticle Physics. This workshop covered an array of subjects like cosmic rays, gravitational waves, space radiation, neutrino physics, cosmological parameters, black holes, dark matter and dark energy.
Changing Patterns of Global Trade outlines the factors underlying important shifts in global trade that have occurred in recent decades. The emergence of global supply chains and their increasing role in trade patterns allowed emerging market economies to boost their inputs in high-technology exports and is associated with increased trade interconnectedness.The analysis points to one important trend taking place over the last decade: the emergence of China as a major systemically important trading hub, reflecting not only the size of trade but also the increase in number of its significant trading partners.