Terms of Trade and Balance of Trade: Some Evidence for the Argentine Economy

Luis Lanteri ()

Economía Mexicana NUEVA ÉPOCA, 2009, vol. XVIII, issue 2, 221-248

Abstract: The terms of trade faced by commodity producing countries have improved markedly in recent years, generating significant changes in their economies. This paper examines the effect of these shocks on Argentina’s domestic product and trade balance. In particular, this paper attempts to verify the existence of the Harberger- Laursen-Metzler (HLM) effect: an increase (decrease) in the terms of trade would lead to an improvement (deterioration) in the trade balance. To this end we use a structural VAR approach, which allows us to estimate the effects of unanticipated terms of trade shocks on the domestic product and trade balance in the long run. We find preliminary evidence that supports the existence of the HLM effect. Further, positive terms of trade shocks have a positive and permanent effect on real GDP.

Keywords: trade balance; terms of trade; Harberger-Laursen-Metzler effect; structural vector auto-regression approach. (search for similar items in EconPapers)
JEL-codes: C3 E32 F41 (search for similar items in EconPapers)
Date: 2009
References: Add references at CitEc
Citations:

Downloads: (external link)
http://www.economiamexicana.cide.edu/num_anteriore ... anteri_(221-248).pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:emc:ecomex:v:18:y:2009:i:2:p:221-248

Access Statistics for this article

Economía Mexicana NUEVA ÉPOCA is currently edited by Juan Rosellón

More articles in Economía Mexicana NUEVA ÉPOCA from CIDE, División de Economía Contact information at EDIRC.
Bibliographic data for series maintained by Ricardo Tiscareño ( this e-mail address is bad, please contact ).