The adjustment effect of the extensive margin on the terms of trade during economic crises
Economics Letters, 2019, vol. 176, issue C, 5-8
Variations in trade flows after economic crises are largely explained by the destruction and creation of trade varieties. This paper investigates the adjustment effect of the extensive margin on the terms of trade of South Korea, which witnessed large trade variations during the 1997 Asian and 2008 global crises. We demonstrate that the conventional terms of trade suffered severely because of ignoring the changes in trade varieties during the economic crises.
Keywords: Economic crisis; Extensive margin; Terms of trade (search for similar items in EconPapers)
JEL-codes: F10 F12 (search for similar items in EconPapers)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:ecolet:v:176:y:2019:i:c:p:5-8
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