That international trade flows respond to changes in real exchange rates is beyond question. What is less clear is whether the measurement of real exchange rates matters for characterizing and predicting such responses. To identify the implications of choosing a given measure of the real...

This paper characterizes the statistical distribution of the response of the U.S. trade account to a dollar depreciation. To accomplish this task, the paper builds and estimates an econometric model of U.S. bilateral trade. Given an exchange-rate shock, this distribution is generated empirically...

Virtually all that is known about the behavior of imports rests on studies estimating income and price elasticities with postwar data. But anyone examining the evolution of trade over the last century cannot avoid asking whether the postwar period provides enough information to characterize that...

This paper builds, estimates. and simulates a world trade model to provide a quantitative analysis of the behavior of the U.S. trade deficit. A key feature of this model is that international trade imbalances add up to zero. The analysis estimates income and price elasticities for bilateral...

Fifty years of econometric work on trade assumes that trade elasticities are invariant to changes in spending patterns, that prices can be taken as given, and that expenditures on domestic and foreign goods can be studied independently of each other. To relax these assumptions, this paper...

This paper examines the adequacy of data on current account positions and international indebtedness as indicators of the need for policy adjustments and coordination. Doubts about the adequacy of these data have been raised by the growth of the global current account discrepancy and the...

Over the past century, the ratio of international trade to GDP has not grown substantially for most major OECD economies. We conjecture that growth in intra-industry trade has been offset by a decline in intra-industry trade. Inter-industry trade may have declined either because of biased growth...

A striking feature of U.S. trade is that both imports and exports are heavily concentrated in capital goods and consumer durables. However, most open economy general equilibrium models ignore the marked divergence between the composition of trade flows and the sectoral composition of U.S....

This paper investigates two issues related to international trade in computers: measurement and prediction. Because of the rapid technological advancement in the computer industry, the Bureau of Economic Analysis (BEA) measures computer prices using techniques that adjust for quality change. The...

This paper documents that a textbook, supply and demand, simultaneous equations model of import prices and quantities can explain many aspects of import price and quantity behavior over the past 25 years, appears to forecast better than standard trade equations, and the instruments we use appear...