Demand Shocks and Trade Balance Dynamics

García-Solanes, José; López, Jesús Rodríguez; Torres, José L.

doi:10.1007/s11079-010-9171-3

Cited by 6 publications

(3 citation statements)

References 29 publications

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“…Generally, an increase in domestic income will lead to a decrease in bilateral trade balances, whereas an increase in foreign income will lead to an increase in bilateral trade balances. García‐Solanes et al. (2010) demonstrate that demand shocks are the main determinants of bilateral trade balances in the USA and Spain, accounting for 80 percent of the variability in trade balances in both the short run and the long run.…”

Section: Empirical Results and Discussionmentioning

confidence: 99%

“…Moreover, this study examines the impacts of the real shocks on bilateral trade balances as the nominal shocks are said to have less significant impacts (Lee and Chinn, 2006). García‐Solanes et al. (2010) demonstrate that real demand shocks explain most of the variability of trade imbalances in the G‐7 countries plus Spain, whereas nominal shocks play a very limited role.…”

Section: Introductionmentioning

confidence: 99%

“…are said to have less significant impacts (Lee and Chinn, 2006). García-Solanes et al (2010) demonstrate that real demand shocks explain most of the variability of trade imbalances in the G-7 countries plus Spain, whereas nominal shocks play a very limited role. Demand policies are the main causes of trade imbalances.…”

Section: Introductionmentioning

confidence: 99%

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Bilateral Trade Balances: Evidence from Malaysia*

Tsen

2011

Asian Economic Journal

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This study examines the impacts of real exchange rates on the bilateral trade balances of Malaysia with the USA, Japan and Singapore. The results for the long‐run cointegrating vectors show that depreciation or devaluation of real exchange rates will improve bilateral trade balances. In the short run, there is some evidence of the J‐curve phenomenon. Changes in real money supply contribute greatly to changes in real exchange rates. Generally, changes in real exchange rates contribute significantly to changes in bilateral trade balances. Monetary policy can be used to influence bilateral trade balances.

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Section: Empirical Results and Discussionmentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

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Bilateral Trade Balances: Evidence from Malaysia*

Tsen

2011

Asian Economic Journal

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International Spillovers from U.S. Fiscal Policy Shocks

Nicar

2015

Open Econ Rev

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I estimate the effect of U.S. government spending and tax shocks on Canada, Japan, and the U.K. for the period 1974 through 2007. Spending and tax shocks are identified using sign restrictions on the impulse responses from a vector autoregression (VAR). I find that while spillover effects of expansionary fiscal shocks are not uniform in direction or magnitude across countries, for Canada and Japan they result in economically significant GDP increases over some portion of the response horizon. For all three countries, government spending shocks generally have larger effects than net tax shocks. Altogether, the results support the idea that some countries may benefit significantly from expansionary U.S. fiscal policy.

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