Trade Liberalization Or Oil Shocks: Which Explains Structural Breaks In International Trade Ratios?
Ben-David and Papell's (1997) tests for structural breaks in international trade ratios over the post-WWII period revealed that trade ratios exhibited structural breaks in their paths and that postbreak trade averages exceeded prebreak averages. They attributed these breaks to trade liberalization policies executed during the postwar period. We reevaluate their results by comparing the postbreak trade ratios with extrapolated ratios based on the prebreak trend, and testing for structural breaks in the relative prices of imports (exports). We find that oil shocks rather than trade liberalization were the major factor behind the structural breaks in trade ratios.
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- Ben-David, Dan & Papell, David H., 1997.
"International trade and structural change,"
Journal of International Economics,
Elsevier, vol. 43(3-4), pages 513-523, November.
- Dan Ben-David & David H. Papell, 1997. "International Trade and Structural Change," NBER Working Papers 6096, National Bureau of Economic Research, Inc.
- Vogelsang, Timothy J., 1997. "Wald-Type Tests for Detecting Breaks in the Trend Function of a Dynamic Time Series," Econometric Theory, Cambridge University Press, vol. 13(06), pages 818-848, December.
- Marvel, Howard P & Ray, Edward J, 1983. "The Kennedy Round: Evidence on the Regulation of International Trade in the United States," American Economic Review, American Economic Association, vol. 73(1), pages 190-197, March.
- Perron, Pierre & Vogelsang, Timothy J, 1992. "Nonstationarity and Level Shifts with an Application to Purchasing Power Parity," Journal of Business & Economic Statistics, American Statistical Association, vol. 10(3), pages 301-320, July.
- Vogelsang, T.I. & Perron, P., 1991. "Nonstationary and Level Shifts With An Application To Purchasing Power Parity," Papers 359, Princeton, Department of Economics - Econometric Research Program.
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