International Trade and the Business Cycle
IMF Working Papers, April 1, 1999
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Bibliographic details
- Authors: Eswar S Prasad
- Published: April 1, 1999
- Series: IMF Working Papers
- DOI: https://doi.org/10.5089/9781451847680.001
Overview
- Author: Eswar S Prasad
- Publication date: April 1, 1999
- Series: Working Paper No. 1999/056
- Issue: 056
- Volume: 1999
- Pages: 25
- DOI: https://doi.org/10.5089/9781451847680.001
- Stock No: WPIEA0561999
- ISBN: 9781451847680
- ISSN: 1018-5941
- Format note: IMF Working Papers. Disclaimer: This Working Paper should not be reported as representing the views of the IMF. The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy.
Research framework and objectives
- Develops a new empirical framework for analyzing the dynamics of the trade balance in response to different types of macroeconomic shocks.
- Provides a synthetic perspective on the conditional correlations between the business cycle and the trade balance that are generated by different shocks.
- Attempts to reconcile conditional-correlation results with unconditional correlations found in the data.
Key findings
- The model highlights how different macroeconomic shocks generate distinct conditional correlations between the business cycle and the trade balance.
- The results suggest that, in the post-Bretton Woods period, nominal shocks have been an important determinant of the forecast error variance for fluctuations in the trade balances of the Group of Seven countries.
Subject coverage and keywords
- Subject: Business cycles, Economic growth, Economic theory, Exchange rates, Foreign exchange, International trade, Real exchange rates, Supply shocks, Trade balance
- Keywords: business cycles, demand shocks to the forecast error variance, exchange rate depreciation, exchange rate fluctuation, Exchange rates, ratio of the trade balance, Real exchange rates, response to a supply shock, supply and demand, supply and demand demand shock, Supply shocks, time series, Trade balance, trade balance response, trade variable, vector autoregressions, WP
Publication metadata and access
- Publication type: IMF Working Papers (web landing page)
- Access formats referenced: Download PDF, More Formats on IMF eLibrary, Order a Print Copy
- Citation preview provided (Chicago format): Eswar S Prasad. "International Trade and the Business Cycle", IMF Working Papers 1999, 056 (1999), accessed 9/17/2026, https://doi.org/10.5089/9781451847680.001
Source: IMF Working Paper "International Trade and the Business Cycle" by Eswar S Prasad, April 1, 1999.
Content in this bundle
- International Trade and the Business Cycle - WP/99/56