IDEAS home Printed from https://ideas.repec.org/a/aea/aecrev/v82y1992i5p1234-53.html
   My bibliography  Save this article

Intertemporal Prices and the U.S. Trade Balance

Author

Listed:
  • Burda, Michael C
  • Gerlach, Stefan

Abstract

The deterioration of the U.S. merchandise trade deficit in the 1980s fell mostly on durable goods. Using a representative-agent model, the authors show that the key distinction between the trade balance in nondurables and durables is the role of intertemporal prices in the latter. A decrease in intertemporal prices associated, for example, with an exchange-rate overvaluation should, therefore, be expected to worsen the trade balance in durables more than in nondurables. This interpretation of the compositional changes of the U.S. trade balance is supported by their econometric findings. Copyright 1992 by American Economic Association.

Suggested Citation

  • Burda, Michael C & Gerlach, Stefan, 1992. "Intertemporal Prices and the U.S. Trade Balance," American Economic Review, American Economic Association, vol. 82(5), pages 1234-1253, December.
  • Handle: RePEc:aea:aecrev:v:82:y:1992:i:5:p:1234-53
    as

    Download full text from publisher

    File URL: http://links.jstor.org/sici?sici=0002-8282%28199212%2982%3A5%3C1234%3AIPATUT%3E2.0.CO%3B2-4&origin=repec
    File Function: full text
    Download Restriction: Access to full text is restricted to JSTOR subscribers. See http://www.jstor.org for details.

    As the access to this document is restricted, you may want to search for a different version of it.

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Erceg, Christopher J. & Guerrieri, Luca & Gust, Christopher, 2008. "Trade adjustment and the composition of trade," Journal of Economic Dynamics and Control, Elsevier, vol. 32(8), pages 2622-2650, August.
    2. Obstfeld, Maurice & Rogoff, Kenneth, 1995. "The intertemporal approach to the current account," Handbook of International Economics,in: G. M. Grossman & K. Rogoff (ed.), Handbook of International Economics, edition 1, volume 3, chapter 34, pages 1731-1799 Elsevier.
    3. M Bahmani-Oskooee & A Ratha, 2009. "S-Curve Dynamics of Trade: Evidence from US-Canada Commodity Trade," Economic Issues Journal Articles, Economic Issues, vol. 14(1), pages 1-16, March.
    4. Warner, Andrew M, 1994. "Does World Investment Demand Determine U.S. Exports?," American Economic Review, American Economic Association, vol. 84(5), pages 1409-1422, December.
    5. Lee, Jaewoo, 1998. "Intertemporal substitution in imported durables," Journal of International Economics, Elsevier, vol. 44(1), pages 113-133, February.
    6. Boileau, Martin, 1999. "Trade in capital goods and the volatility of net exports and the terms of trade," Journal of International Economics, Elsevier, vol. 48(2), pages 347-365, August.
    7. Fujiwara, Ippei & Hara, Naoko & Hirose, Yasuo & Teranishi, Yuki, 2005. "The Japanese Economic Model (JEM)," Monetary and Economic Studies, Institute for Monetary and Economic Studies, Bank of Japan, vol. 23(2), pages 61-142, May.
    8. Andrew M. Warner, 1992. "Import demand and supply with relatively few theoretical or empirical puzzles," International Finance Discussion Papers 433, Board of Governors of the Federal Reserve System (U.S.).
    9. Abdorreza Soleymani & Soo Y. Chua & Hamat Che Abdul Fatah, 2016. "The Effects of Currency Depreciation on Industry Trade Flows between Malaysia and China," The International Trade Journal, Taylor & Francis Journals, vol. 30(3), pages 181-206, May.
    10. Mohsen Bahmani-Oskooee & Yongqing Wang, 2009. "Exchange Rate Sensitivity Of Australia'S Trade Flows: Evidence From Industry Data," Manchester School, University of Manchester, vol. 77(1), pages 1-16, January.
    11. Mohsen Bahmani-Oskooee & Yongqing Wang, 2007. "United States-China Trade At The Commodity Level And The Yuan-Dollar Exchange Rate," Contemporary Economic Policy, Western Economic Association International, vol. 25(3), pages 341-361, July.
    12. Carone, Giuseppe, 1996. "Modeling the U.S. demand for imports through cointegration and error correction," Journal of Policy Modeling, Elsevier, vol. 18(1), pages 1-48, February.
    13. Tarlok Singh, 2007. "Intertemporal Optimizing Models Of Trade And Current Account Balance: A Survey," Journal of Economic Surveys, Wiley Blackwell, vol. 21(1), pages 25-64, February.
    14. Singh, Tarlok, 2004. "On the optimizing model of the balance of trade in India," Journal of Policy Modeling, Elsevier, vol. 26(5), pages 605-625, July.
    15. M Bahmani-Oskooee & M Kovyryalova, 2008. "The J-Curve: Evidence from Industry Trade Data between US and UK," Economic Issues Journal Articles, Economic Issues, vol. 13(1), pages 25-44, March.
    16. Breuer, Janice Boucher & Clements, Leianne A., 2003. "The commodity composition of US-Japanese trade and the yen/dollar real exchange rate," Japan and the World Economy, Elsevier, vol. 15(3), pages 307-330, August.
    17. Hossain, Ferdaus, 1995. "Current account determination in the intertemporal framework: an empirical analysis," ISU General Staff Papers 1995010108000011939, Iowa State University, Department of Economics.
    18. Yi-Bin Chiu & Chia-Hung Sun, 2009. "Economic interdependence and bilateral trade imbalance across the Taiwan Strait," Journal of Economic Studies, Emerald Group Publishing, vol. 36(4), pages 411-432, September.
    19. Andrew Ojede, 2015. "Exchange Rate Shocks and U.S. Services and Agricultural Exports: Which Export Sector is More Affected?," The International Trade Journal, Taylor & Francis Journals, vol. 29(3), pages 228-250, August.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:aea:aecrev:v:82:y:1992:i:5:p:1234-53. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Jane Voros) or (Michael P. Albert). General contact details of provider: http://edirc.repec.org/data/aeaaaea.html .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.