Global Imbalances; The Role of Non-Tradabletotal Factor Productivity in Advanced Economies
Alessandro Rebucci (),
Nicoletta Batini (),
Pietro Cova () and
Massimiliano Pisani ()
No 09/63, IMF Working Papers from International Monetary Fund
This paper investigates the role played by total factor productivity (TFP) in the tradable and nontradable sectors of the United States, the euro area, and Japan in the emergence and evolution of today's global trade imbalances. Simulation results based on a dynamic general equilibrium model of the world economy, and using the EU KLEMS database, indicate that TFP developments in these economies can account for a significant fraction of the total deterioration in the U.S. trade balance since 1999, as well as account for some the surpluses in the euro area and Japan. Differences in TFP developments across sectors can also partially explain the evolution of the real effective value of the U.S. dollar during this period.
Keywords: Economic models; European Union; Exchange rates; Developed countries; Cross country analysis; Balance of trade; Global imbalances; Japan; Payments imbalances; Productivity; Time series; United States; trade deficit, non-tradable sector, GEM, tfp, tradable goods, elasticity of substitution, intermediate goods, terms of trade, (search for similar items in EconPapers)
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