This paper studies the terms of trade effects from unexpected economy-specific productivity increases in both developing and advanced economies using a panel vector autoregression model with interactive fixed effects and the “max-share” approach developed by Francis et al. (2014). First, we...

This paper studies the terms-of-trade effects from economy-specific shocks to productivity with a focus on developing economies using a panel vector autoregression model with interactive fixed effects and the “maxshare” approach. We find that the terms of trade in developing economies show...