This paper uses a 42-country model of production and trade to assess the implications of eliminating current account imbalances for relative wages, relative GDPs, real wages, and real absorption. How much relative GDPs need to change depends on flexibility of two forms: factor mobility and adjustment in sourcing of imports, with more flexibility requiring less change. At the extreme, U.S. GDP falls by 30 percent relative to the world's. Because of the pervasiveness of nontraded goods, however, most domestic prices move in parallel with relative GDP, so that changes in real GDP are small. IMF Staff Papers (2008) 55, 511–540. doi:10.1057/imfsp.2008.17; published online 24 June 2008
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Article provided by Palgrave Macmillan Journals in its journal IMF Staff Papers.
Volume (Year): 55 (2008) Issue (Month): 3 (July) Pages: 511-540 Download reference. The following formats are available: HTML
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Robert Dekle & Jonathan Eaton & Samuel Kortum, 2007.
"Unbalanced Trade,"
American Economic Review,
American Economic Association, vol. 97(2), pages 351-355, May.
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Robert Dekle & Jonathan Eaton & Samuel Kortum, 2007.
"Unbalanced Trade,"
NBER Working Papers
13035, National Bureau of Economic Research, Inc.
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