Doomed to Deficits? Aggregate U.S. Trade Flows Re-Examined

Menzie Chinn

No 9521, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: This paper examines the stability of import and export demand functions for the United States over the 1975q1-2001q2 period. Using the Johansen maximum likelihood approach, an export demand function is readily identified. In contrast, there appears to be a structural break in the import demand function in 1995; specifications incorporating this break pass tests for cointegration, although the price elasticity is not statistically significant. Only when excluding computers and parts from the import series is a stable import demand function detected. The resulting point estimates do not exhibit the income asymmetry typically found in other studies of aggregate U.S. trade flows.

JEL-codes: F31 F41 (search for similar items in EconPapers)
Date: 2003-03
New Economics Papers: this item is included in nep-mac
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Citations: View citations in EconPapers (11)

Published as Menzie D. Chinn, 2005. "Doomed to Deficits? Aggregate U.S. Trade Flows Re-Examined," Review of World Economics (Weltwirtschaftliches Archiv), Springer, vol. 141(3), pages 460-485, October.

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