A Global Trade Model for the Euro Area

Antonello D'Agostino, Michele Modugno and Chiara Osbat

No 2015-13, Finance and Economics Discussion Series from Board of Governors of the Federal Reserve System (U.S.)

Abstract: We propose a model for analyzing euro area trade based on the interaction between macroeconomic and trade variables. First, we show that macroeconomic variables are necessary to generate accurate short-term trade forecasts; this result can be explained by the high correlation between trade and macroeconomic variables, with the latter being released in a more timely manner. Second, the model tracks well the dynamics of trade variables conditional on the path of macroeconomic variables during the great recession; this result makes our model a reliable tool for scenario analysis. Third, we quantify the contribution of the most important euro area trading partners (regions) to the aggregate extra euro area developments: we evaluate the impact of an increase of the external demand from a specific region on the extra euro area trade.

JEL-codes: C38 F17 F47 (search for similar items in EconPapers)
Pages: 35 pages
Date: 2015-02-27
New Economics Papers: this item is included in nep-eec and nep-int
References: Add references at CitEc
Citations: View citations in EconPapers (4)

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http://www.federalreserve.gov/econresdata/feds/2015/files/2015013pap.pdf Full text (application/pdf)
http://dx.doi.org/10.17016/FEDS.2015.013 http://dx.doi.org/10.17016/FEDS.2015.013 (application/pdf)

Related works:
Journal Article: A Global Trade Model for the Euro Area (2017)
Working Paper: A global trade model for the euro area (2016)
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Persistent link: https://EconPapers.repec.org/RePEc:fip:fedgfe:2015-13

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