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| Amit Ghosh |
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| ''Is there an S-curve relationship between U.S. trade balance and terms of trade? An analysis across industries and countries'' |
| ( 2012, Vol. 32 No.1 ) |
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| A 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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| Keywords: S-curve, trade balance, terms-of-trade, real exchange rates |
JEL: F3 - International Finance: General
F4 - Macroeconomic Aspects of International Trade and Finance: General |
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| Manuscript Received : Jan 10 2012 | | Manuscript Accepted : Jan 23 2012 |
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