Intertemporal Prices and the US Trade Balance in Durable Goods

Michael Burda and Stefan Gerlach ()

No 379, CEPR Discussion Papers from Centre for Economic Policy Research

Abstract: This paper shows that virtually all of the rapid worsening of the US trade deficit since 1982 can be attributed to the balance on durable goods. Moreover, this deterioration has been concentrated in capital goods rather than consumer durables intertemporal prices play a key role in the behaviouring or automobiles. In the context of a simple model, we show that the trade balance in durables (but not in nondurables) durables is the role of intertemporal prices in the latter. This result suggests that the deficit on durables may be due to a reduction of their intertemporal prices associated with, among other things, the temporary appreciation of the dollar in the early 1980s. The key role of intertemporal prices is confirmed by our econometric findings.

Keywords: Durable Goods; Intertemporal Prices; Trade Balance (search for similar items in EconPapers)
Date: 1990-03
References: Add references at CitEc
Citations:

Downloads: (external link)
http://www.cepr.org/active/publications/discussion_papers/dp.php?dpno=379 (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:cpr:ceprdp:379

Ordering information: This working paper can be ordered from
http://www.cepr.org/ ... pers/dp.php?dpno=379

Access Statistics for this paper

More papers in CEPR Discussion Papers from Centre for Economic Policy Research 33 Great Sutton Street, London EC1V 0DX, UK.
Bibliographic data for series maintained by CEPR ().