Quotation Badinger, Harald, Fichet de Clairfontaine, Aurélien. 2018. Trade Balance Dynamics and Exchange Rates: In Search of the J-Curve Using a Structural Gravity Approach.


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Abstract

This paper uses a structural gravity approach, specifying currency movements as trade cost component to derive an empirical trade balance model, which incorporates multilateral resistance terms and accounts for the cross-country variation in the exchange rate pass-through into import and export prices. The model is estimated using quarterly bilateral trade flows between 47 countries over the period 2010Q1-2017Q2, disaggregated into 97 commodity groups. Our results support the existence of an "aggregate'' J-curve, pooled over commodity groups; at the same time they point to considerable heterogeneity in the trade balance dynamics across industries below the surface of aggregate data.

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Publication's profile

Status of publication Published
Affiliation WU
Type of publication Working/discussion paper, preprint
Language English
Title Trade Balance Dynamics and Exchange Rates: In Search of the J-Curve Using a Structural Gravity Approach
Year 2018
URL http://epub.wu.ac.at/5971/
JEL F12, F31, F32

Associations

People
Badinger, Harald (Details)
Fichet de Clairfontaine, Aurélien (Former researcher)
Organization
Institute for International Economics IN (Details)
Research areas (ÖSTAT Classification 'Statistik Austria')
1807 Economic geography (Details)
5300 Economics (Details)
5314 Trade Research (Details)
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