The Composition and Cyclical Behavior of Trade Flows in Emerging Economies
IMF Working Papers, February 1, 2010
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- The Composition and Cyclical Behavior of Trade Flows in Emerging Economies
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Bibliographic details
- Authors: Reinout De Bock
- Published: February 1, 2010
- Series: IMF Working Papers
- DOI: https://doi.org/10.5089/9781451963106.001
Summary findings
- Trade flows data show that the composition and cyclical properties of imports are similar in developed economies and emerging markets (EM).
- Exports differ: unlike developed economies,
- EM export few or only a selective set of capital goods.
- Capital good and overall exports in EM tend to be acyclical.
- The lack of procyclicality in exports drives the strong countercyclicality of EM trade balances observed in previous studies.
- A quantitative exercise demonstrates how the standard small open economy business cycle model can be improved for EM by incorporating these features.
Quantitative exercise and model implications
- The standard small open economy business cycle model can be improved for emerging markets by:
- Incorporating the selective export of capital goods.
- Allowing capital good and overall exports to be acyclical rather than procyclical.
- These model modifications help account for the observed strong countercyclicality of EM trade balances.
Key statistics and publication metadata
- Author: Reinout De Bock
- Date: February 1, 2010
- Pages: 32
- Volume: 2010
- Issue: 046
- Series: Working Paper No. 2010/046
- DOI: https://doi.org/10.5089/9781451963106.001
- Stock No: WPIEA2010046
- ISBN: 9781451963106
- ISSN: 1018-5941
- Subject tags: Consumption, Exports, Imports, Labor, Trade balance
- Keywords: WP
Source: "The Composition and Cyclical Behavior of Trade Flows in Emerging Economies", Reinout De Bock, IMF Working Papers, February 1, 2010.