What Can Account for Fluctuations in the Terms of Trade?
Marianne Baxter () and
Michael Kouparitsas ()
International Finance, 2006, vol. 9, issue 1, 63-86
This paper studies the sources of terms of trade volatility. We decompose the terms of trade into two components. The ‘goods price’ component stems from differences in the composition of import and export baskets, while the ‘country price’ component stems from deviations from the law of one price. Countries are classified according to their major import and export goods: commodities, manufactured goods and fuels. Except fuel exporters, there is roughly equal importance of goods price vs country price volatility. These results suggest that there may be a role for reducing terms of trade volatility through diversification of a country's exports.
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (14) Track citations by RSS feed
Downloads: (external link)
Working Paper: What Can Account for Fluctuations in the Terms of Trade? (2000)
Working Paper: What can account for fluctuations in the terms of trade? (2000)
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
Persistent link: https://EconPapers.repec.org/RePEc:bla:intfin:v:9:y:2006:i:1:p:63-86
Ordering information: This journal article can be ordered from
http://www.blackwell ... bs.asp?ref=1367-0271
Access Statistics for this article
International Finance is currently edited by Benn Steil
More articles in International Finance from Wiley Blackwell
Bibliographic data for series maintained by Wiley Content Delivery ().