Understanding the Evolution of Trade Deficits: Trade Elasticities of Industrialized Countries

16 Pages Posted: 11 Nov 2007

See all articles by Leland Dod Crane

Leland Dod Crane

Board of Governors of the Federal Reserve System

Meredith Crowley

University of Cambridge - Faculty of Economics

Saad Quayyum

International Monetary Fund (IMF)

Abstract

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

Suggested Citation

Crane, Leland Dod and Crowley, Meredith and Quayyum, Saad, Understanding the Evolution of Trade Deficits: Trade Elasticities of Industrialized Countries. Economic Perspectives, Vol. 31, No. 4, 2007, Available at SSRN: https://ssrn.com/abstract=1028746

Leland Dod Crane

Board of Governors of the Federal Reserve System ( email )

20th Street and Constitution Avenue NW
Washington, DC 20551
United States

Meredith Crowley (Contact Author)

University of Cambridge - Faculty of Economics ( email )

Sidgwick Avenue
Cambridge, CB3 9DD
United Kingdom

HOME PAGE: http://https://meredithcrowley.weebly.com/

Saad Quayyum

International Monetary Fund (IMF)

700 19th Street, N.W.
Washington, DC 20431
United States

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