Belke, Ansgar; Elstner, Steffen; Rujin, Svetlana - 2020 - This version: February 7, 2020
Does an improvement in growth prospects lead to a fall in the trade balance? The relevance of this question stems from … policymakers. However, we do not find that improved growth prospects (news shocks) necessarily lead to negative trade balance … shocks induce positive and transitory trade balance effects. Consumption smoothing and substantial fluctuations in investment …