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The Causes of and Gains from Intertemporal Trade


  • William D. Craighead
  • Norman C. Miller


The authors show how the causes of and the gains from current account imbalances can be integrated into undergraduate economics courses using the same pedagogical tools that are used to explain comparative advantage and the gains from trade. A nonzero current account provides a mechanism for intertemporal trade, and a country has a comparative advantage in present (or future) goods if its autarky real interest rate is below (or above) the world real interest rate. The authors explain why the intertemporal approach to the current account reaches different conclusions from the traditional approach regarding welfare effects. Also, the authors integrate alternative approaches for explaining the underlying cause(s) of nonzero current account balances.

Suggested Citation

  • William D. Craighead & Norman C. Miller, 2010. "The Causes of and Gains from Intertemporal Trade," The Journal of Economic Education, Taylor & Francis Journals, vol. 41(3), pages 275-291, June.
  • Handle: RePEc:taf:jeduce:v:41:y:2010:i:3:p:275-291 DOI: 10.1080/00220485.2010.486732

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    References listed on IDEAS

    1. Austin Nichols, 2007. "RD: Stata module for regression discontinuity estimation," Statistical Software Components S456888, Boston College Department of Economics, revised 30 Sep 2016.
    2. Ann L. Owen & Elizabeth J. Jensen, 2000. "Why Are Women Such Reluctant Economists? Evidence from Liberal Arts Colleges," American Economic Review, American Economic Association, vol. 90(2), pages 466-470, May.
    3. Imbens, Guido W. & Lemieux, Thomas, 2008. "Regression discontinuity designs: A guide to practice," Journal of Econometrics, Elsevier, vol. 142(2), pages 615-635, February.
    4. Karen E. Dynan & Cecilia Elena Rouse, 1997. "The Underrepresentation of Women in Economics: A Study of Undergraduate Economics Students," The Journal of Economic Education, Taylor & Francis Journals, vol. 28(4), pages 350-368, December.
    5. Charles Ballard & Marianne Johnson, 2005. "Gender, Expectations, And Grades In Introductory Microeconomics At A Us University," Feminist Economics, Taylor & Francis Journals, vol. 11(1), pages 95-122.
    6. Kevin N. Rask & Elizabeth M. Bailey, 2002. "Are Faculty Role Models? Evidence from Major Choice in an Undergraduate Institution," The Journal of Economic Education, Taylor & Francis Journals, vol. 33(2), pages 99-124, June.
    7. Austin Nichols, 2007. "Causal inference with observational data," Stata Journal, StataCorp LP, vol. 7(4), pages 507-541, December.
    8. John F. Chizmar, 2000. "A Discrete-Time Hazard Analysis of the Role of Gender in Persistence in the Economics Major," The Journal of Economic Education, Taylor & Francis Journals, vol. 31(2), pages 107-118, June.
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