Carneiro, Rafael Dix; Pessoa, João Paulo; … - 2021
We study the role of global trade imbalances in shaping the adjustment dynamics in response to trade shocks. We build …-saving decisions in each country commanded by representative households, leading to endogenous trade imbalances, and 2) labor market … costs, and intertemporal preferences (savings gluts). We find that modeling trade imbalances changes both qualitatively and …