Dynamics of the trade balance and the terms of trade: the S-curve
David Backus (),
Patrick Kehoe () and
No 9211, Working Paper from Federal Reserve Bank of Cleveland
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.
Keywords: Balance; of; trade (search for similar items in EconPapers)
References: View references in EconPapers View complete reference list from CitEc
Citations View citations in EconPapers (5) Track citations by RSS feed
Downloads: (external link)
Our link check indicates that this URL is bad, the error code is: 404 Not Found (http://www.clevelandfed.org/research/Workpaper/1992/wp9211.pdf [302 Redirect]--> https://www.clevelandfed.org/research/Workpaper/1992/wp9211.pdf [301 Moved Permanently]--> https://www.clevelandfed.org/research/workpaper/1992/wp9211.pdf)
Journal Article: Dynamics of the Trade Balance and the Terms of Trade: The J-Curve? (1994)
Software Item: DOS executable for "Dynamics of the Trade Balance and the Terms of Trade: The J-Curve?" (1992)
Software Item: Web interface for "Dynamics of the Trade Balance and the Terms of Trade: The J-Curve?" (1992)
Working Paper: Dynamics of the Trade Balance and the Terms of Trade: The S-Curve (1992)
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
Persistent link: http://EconPapers.repec.org/RePEc:fip:fedcwp:9211
Ordering information: This working paper can be ordered from
Access Statistics for this paper
More papers in Working Paper from Federal Reserve Bank of Cleveland Contact information at EDIRC.
Series data maintained by Lee Faulhaber ().