Terms of Trade Shocks and the Current Account /

This paper examines the relationship between terms of trade shocks, private saving, and the current account position. The relationship between these variables is theoretically ambiguous: an adverse transitory terms of trade shock can either induce a deterioration or an improvement in the current acc...

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Bibliographic Details
Main Author: Cashin, Paul
Other Authors: McDermott, C.
Format: Journal
Language:English
Published: Washington, D.C. : International Monetary Fund, 1998.
Series:IMF Working Papers; Working Paper ; No. 1998/177
Online Access:Full text available on IMF
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245 1 0 |a Terms of Trade Shocks and the Current Account /  |c Paul Cashin, C. McDermott. 
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300 |a 1 online resource (40 pages) 
490 1 |a IMF Working Papers 
500 |a <strong>Off-Campus Access:</strong> No User ID or Password Required 
500 |a <strong>On-Campus Access:</strong> No User ID or Password Required 
506 |a Electronic access restricted to authorized BRAC University faculty, staff and students 
520 3 |a This paper examines the relationship between terms of trade shocks, private saving, and the current account position. The relationship between these variables is theoretically ambiguous: an adverse transitory terms of trade shock can either induce a deterioration or an improvement in the current account, depending on whether the resulting income effects are greater or less than the resulting substitution effects. The substitution effects involve both intertemporally substituting consumption and intratemporally substituting consumption between importables and nontradables. The relative strength of these substitution effects is estimated using data for five OECD countries during 1970/95; both are found to exert large and significant effects on the current account balance. 
538 |a Mode of access: Internet 
700 1 |a McDermott, C. 
830 0 |a IMF Working Papers; Working Paper ;  |v No. 1998/177 
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