Terms of Trade Shocks and the Current Account in Small Island States

Amelia Santos-Paulino

No RP2007-20, WIDER Working Paper Series from World Institute for Development Economic Research (UNU-WIDER)

Abstract: This paper investigates the dynamic relationship between terms of trade shocks and the current account in selected small islands developing states. The findings show that the terms of trade explain a significant proportion of the variation in the current account balances. Also, the current account balances reflect a J-curve type reaction to terms of trade innovations. Real output also reacts negatively to changes in the terms of trade.

Keywords: Panel analysis; Regression analysis; Terms of trade (search for similar items in EconPapers)
Date: 2007
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Citations: View citations in EconPapers (3)

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