International Evidenceon the Determinants of Trade Dynamics

Eswar Prasad and Jeffery Gable

No 1997/172, IMF Working Papers from International Monetary Fund

Abstract: This paper provides some new empirical perspectives on the relationship between international trade and macroeconomic fluctuations in industrial economies. First, a comprehensive set of stylized facts concerning fluctuations in trade variables and their determinants are presented. A measure of the quantitative importance of international trade for the propagation of domestic business cycles is then constructed, focusing on the role of external trade as a catalyst for cyclical recoveries. Finally, structural vector autoregression models are used to characterize the joint dynamics of output, exchange rates, and trade variables in response to different types of macroeconomic shocks.

Keywords: WP; trade; supply shock; trade variable; Trade balance; business cycles; exchange rates; OECD industrial economies; trade ratio; business cycle recovery; net trade balance; exchange rate depreciation; demand condition; merchandise trade number; trade volume; trade dynamics; trade balance fluctuation; trade-weighted average; trade balance to output growth; Exports; Real exchange rates; Global (search for similar items in EconPapers)
Pages: 43
Date: 1997-12-01
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Citations: View citations in EconPapers (2)

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Journal Article: International Evidence on the Determinants of Trade Dynamics (1998)
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