Trade Balances and the Terms of Trade in G-7 Countries: Penal Cointegration Approach

This paper empirically analyzes the long-run equilibrium between trade balances and the terms of trade using the nonstationary panel data analysis. Empirical results indicate that trade balances and the terms of trade do not have cointegrating relation for G-7 countries. This implies that the deterioration in the terms of trade will not necessarily improve a country's trade balance in the long-run.

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Year of publication:	2008
Authors:	HAMORI, Shigeyuki
Published in:	Applied Econometrics and International Development. - Euro-American Association of Economic Development. - Vol. 8.2008, 2, p. 13-22
Publisher:	Euro-American Association of Economic Development
Subject:	panel unit root \| panel cointegration \| Marshall Lerner condition

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Type of publication:	Article
Classification:	F41 - Open Economy Macroeconomics ; C32 - Time-Series Models
Source:	RePEc - Research Papers in Economics

Persistent link: https://www.econbiz.de/10005607509