Understanding the Evolution of Trade Deficits: Trade Elasticities of Industrialized Countries
16 Pages Posted: 11 Nov 2007
In this article, the authors present updated trade elasticities - measures of how much imports and exports change in response to income and price changes - for the U.S. and six other industrialized countries, collectively known as the Group of Seven. They find that the imports and exports of these countries are slightly more responsive to changes in a country's total income over a period that ends in 2006, compared with a period that ends in 1994.
Keywords: trade deficit, trade balance, import elasticity, export elasticity, trade elasticities, Trade Forecasting and Simulation, Forecasting and Simulation
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