Is there an S-curve relationship between U.S. trade balance and terms of trade? An analysis across industries and countries
AbstractA key relationship in international economics is that between trade flows and exchange rates. This paper examines the empirical evidence of S-curve relationship between U.S. trade balance and terms of trade both at the aggregated and disaggregated level from 1989Q1 to 2010Q4. I find evidence of an S-curve for U.S. total trade in all goods and services with the rest of the world, as well as that for overall manufacturing and non-manufacturing categories. I further examine the top 20 industries at the SITC 3-digit level, and find evidence of an S-curve in 15 industries. Finally, the relationship is explored with the major trading partners in each of these twenty industries, also yielding positive evidence for several nations.
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Bibliographic InfoArticle provided by AccessEcon in its journal Economics Bulletin.
Volume (Year): 32 (2012)
Issue (Month): 1 ()
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S-curve; trade balance; terms-of-trade; real exchange rates;
Find related papers by JEL classification:
- F3 - International Economics - - International Finance
- F4 - International Economics - - Macroeconomic Aspects of International Trade and Finance
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- Mohsen Bahmani-Oskooee & Artatrana Ratha, 2007. "The S-curve Dynamics of US Bilateral Trade," Review of International Economics, Wiley Blackwell, Wiley Blackwell, vol. 15(2), pages 430-439, 05.
- Bahmani-Oskooee, Mohsen & Ratha, Artatrana, 2010. "S-Curve dynamics of trade between U.S. and China," China Economic Review, Elsevier, Elsevier, vol. 21(2), pages 212-223, June.
- M Bahmani-Oskooee & A Ratha, 2009. "S-Curve Dynamics of Trade: Evidence from US-Canada Commodity Trade," Economic Issues Journal Articles, Economic Issues, Economic Issues, vol. 14(1), pages 1-16, March.
- Bahmani-Oskooee, Mohsen & Ratha, Artarana, 2007. "Bilateral S-curve between Japan and her trading partners," Japan and the World Economy, Elsevier, Elsevier, vol. 19(4), pages 483-489, December.
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