{
  "title": "Terms-of-Trade Shocks are Not all Alike",
  "publication": "IMF Working Papers, December 11, 2020",
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  "summary": "When analyzing terms-of-trade shocks, it is implicitly assumed that the economy responds symmetrically to changes in export and import prices. Using a sample of developing countries our paper shows that this is not the case.",
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    {
      "heading": "Summary",
      "content": "- When analyzing terms-of-trade shocks, it is implicitly assumed that the economy responds symmetrically to changes in export and import prices. Using a sample of developing countries the paper shows that this is not the case.\n- Taken together, export and import price shocks account for around 40 percent of output fluctuations.\n- Export price shocks are, on average, twice as important as import price shocks for domestic business cycles."
    },
    {
      "heading": "Methodology",
      "content": "- Construct export and import price indices using commodity and manufacturing price data matched with trade shares.\n- Separately identify export price, import price, and global economic activity shocks using sign and narrative restrictions.\n- Sample: developing countries."
    },
    {
      "heading": "Core findings",
      "content": "- Export and import price shocks jointly explain around 40 percent of output fluctuations.\n- Export price shocks play a substantially larger role than import price shocks: export price shocks are, on average, twice as important as import price shocks for domestic business cycles.\n\n---\n\n Content in this bundle\n\n- Working Paper\n  - Working Paper (Markdown version){rel=\"alternate\" type=\"text/markdown\"}\n  - Working Paper (PDF){rel=\"external\" type=\"application/pdf\"}\n\n---\n\nSource: https://www.imf.org/en/publications/wp/issues/2020/12/11/terms-of-trade-shocks-are-not-all-alike-49920"
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    "Authors: Luciana Juvenal",
    "Published: December 11, 2020",
    "Series: IMF Working Papers",
    "DOI: https://doi.org/10.5089/9781513563916.001",
    "When analyzing terms-of-trade shocks, it is implicitly assumed that the economy responds symmetrically to changes in export and import prices. Using a sample of developing countries the paper shows that this is not the case.",
    "Taken together, export and import price shocks account for around 40 percent of output fluctuations.",
    "Export price shocks are, on average, twice as important as import price shocks for domestic business cycles.",
    "Construct export and import price indices using commodity and manufacturing price data matched with trade shares.",
    "Separately identify export price, import price, and global economic activity shocks using sign and narrative restrictions.",
    "Sample: developing countries.",
    "Export and import price shocks jointly explain around 40 percent of output fluctuations.",
    "Export price shocks play a substantially larger role than import price shocks: export price shocks are, on average, twice as important as import price shocks for domestic business cycles.",
    "**Working Paper**"
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