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IMF Staff papers Volume 35 No. 4

An intertemporal optimizing model of a small open economy is used to analyze how terms of trade changes affect real exchange rates and the trade balance. Temporary current, (expected) future, and permanent changes in the terms of trade are considered. The results suggest that the relationship betwee...

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Bibliographic Details
Corporate Author: International Monetary Fund Research Dept
Format: eBook
Language:English
Published: Washington, D.C. International Monetary Fund 1988
Series:IMF Staff Papers
Subjects:
Economic Policy
Debt
Real Exchange Rates
Aggregate Factor Income Distribution
International Economics
Financial Risk Management
Finance
Debt Management
Foreign Exchange
Public Finance
Macroeconomics: Consumption
Debts, External
Terms Of Trade
Currency
Exports And Imports
International Trade
Short-term Capital Movements
Empirical Studies Of Trade
Balance Of Payments
Income
Sovereign Debt
Nternational Cooperation
Debt Relief
Asset And Liability Management
Consumption
Public Finance & Taxation
Saving
Wealth
National Accounts
Economics
Current Account Adjustment
Macroeconomics
China, People's Republic Of
Online Access:
Collection: International Monetary Fund - Collection details see MPG.ReNa
Description
Summary:An intertemporal optimizing model of a small open economy is used to analyze how terms of trade changes affect real exchange rates and the trade balance. Temporary current, (expected) future, and permanent changes in the terms of trade are considered. The results suggest that the relationship between the terms of trade and the current account (the so-called Harberger-Laursen-Metzler effect) is sensitive to whether the model incorporates nontradable goods. Thus, the real exchange rate may be an important variable through which terms of trade shocks are transmitted to the current account
Physical Description:204 pages
ISBN:9781451930733

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