Terms-of-Trade Shocks Are Not All Alike

Federico Di Pace, Luciana Juvenal and Ivan Petrella

American Economic Journal: Macroeconomics, 2025, vol. 17, issue 2, 24-64

Abstract: Terms of trade are an inaccurate empirical proxy for how fluctuations in international prices affect the economy. To capture the relevance of terms-of-trade fluctuations for the domestic business cycle, the role of export and import prices needs to be analyzed separately. Using a sample of developing economies, we find that the economy's response to a positive export price shock does not mirror the response to a negative import price shock.

JEL-codes: E23 E32 E43 F14 F44 O11 (search for similar items in EconPapers)
Date: 2025
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Related works:
Working Paper: Terms-of-trade shocks are not all alike (2021)
Working Paper: Terms-of-Trade Shocks are Not all Alike (2020)
Working Paper: Terms-of-Trade Shocks are Not all Alike (2020)
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DOI: 10.1257/mac.20220035

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