The Terms of Trade, Productivity Shocks, and the Current Account

Talan B. Iscan ()

Department of Economics at Dalhousie University working papers archive from Dalhousie, Department of Economics

Abstract: This paper extends the analytical framework provided by Glick and Rogoff (JME 1995) to an economy with traded and nontraded goods, and it analyzes the impact of country-specific and global productivity shocks on the current account and investment that are largely consistent with the empirical results. First, the current account responds by more than investment to country-specific traded productivity growth. Second, global traded productivity and country-specific traded productivity growth have no effect on the current account, but they have significant impact on investment.

Keywords: TRADE; PRODUCTIVITY; INVESTMENTS (search for similar items in EconPapers)
JEL-codes: F32 F41 (search for similar items in EconPapers)
Date: 1998

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Working Paper: The Terms of Trade, Productivity Shocks, and The Current Account (1998)
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Persistent link: http://EconPapers.repec.org/RePEc:dal:wparch:98-01

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