Supply Pressure and the Export-Import Performance in the Japan-U.S. Bilateral Trade
IMF Working Papers, May 1, 1994
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- Supply Pressure and the Export-Import Performance in the Japan-U.S. Bilateral Trade
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Bibliographic details
- Authors: Yusuke Onitsuka
- Published: May 1, 1994
- Series: IMF Working Papers
- DOI: https://doi.org/10.5089/9781451847321.001
Summary
- Examines effects of the supply pressure of exports in the Japan-U.S. bilateral trade.
- Adopts a simultaneous equation approach with an Almon lag structure.
- Specifies two factors of supply pressure: full-employment capacity and inventory.
- Estimates positively-sloped export supply functions with these two shift factors.
- Finds capacity is positively correlated with exports; inventory is often negatively correlated.
- Finds export supply pressure is much stronger in Japan’s exports than in the U.S. exports.
- Finds supply pressure often affects exports with a lag structure spreading over twelve quarters.
Methodology
- Model: simultaneous equation approach.
- Lag specification: Almon lag structure.
- Supply pressure factors specified as shift factors in export supply functions:
- Full-employment capacity.
- Inventory.
Key Findings and Analysis
- Export supply functions estimated are positively sloped when including full-employment capacity and inventory as shift factors.
- Full-employment capacity:
- Positively correlated with exports.
- Inventory:
- Often negatively correlated with exports.
- Cross-country comparison:
- Export supply pressure is much stronger in Japan’s exports than in U.S. exports.
- Dynamic effects:
- Supply pressure impacts exports with effects distributed across twelve quarters.