Search Results
Early U.S. Trade Deficits and Industrialization
Trade deficits during the country’s first phase of industrialization did not inhibit U.S. development and may have facilitated industrialization.
Trade and Gold Reserves after the Demise of the Classical Gold Standard
After the early 1920s, the relationship between gold reserves and trade flows was tenuous at best as the international payments system experienced heightened uncertainty and significant change.
Technological Innovations and Global Trade of Services
Technological innovations may give the U.S. a significant advantage in the global trade of services, which could potentially help the U.S. close its trade deficit.
Trade and U.S. Gold Reserves during the Classical Gold Standard Era
During the period from around 1870 to the outbreak of World War I, changes in a nation’s gold reserves were closely linked to changes in its trade balances.
Journal Article
Will Tech Improvements for Trading Services Switch the U.S. into a Net Exporter?
Innovations gave the U.S. a trade advantage in goods many years ago. Can innovations do the same for trade in services for the U.S.?
Discussion Paper
Recycling Oil Revenue
Almost half the U.S. merchandise trade deficit was tied to petroleum ten years ago. Oil prices were above $100 a barrel, the economy was doing well enough that oil consumption was growing despite high oil prices, and domestic oil production was falling. The U.S. petroleum trade balance has since narrowed substantially from $400 billion in 2008 to under $65 billion in 2017 as a result of lower oil prices, higher domestic production, and a prolonged period of flat-to-falling petroleum consumption. Going forward, the changes in domestic production and consumption have significantly moderated the ...
Working Paper
Equilibrium Sovereign Default with Exchange Rate Depreciation
This study proposes and quantitatively assesses a terms-of-trade penalty for defaulting: defaulters must exchange more of their own goods for imports, which causes an adjustment to the equilibrium exchange rate. This penalty can take the place of an ad hoc fall in output: Facing only this penalty and temporary exclusion from debt markets, countries are willing to maintain borrowing obligations up to a realistic level of debt. The terms-of-trade penalty is consistent with the observed relationship between sovereign default and a country's trade flows and prices. The defaulter's currency ...
Working Paper
Real Exchange Rate and Net Trade Dynamics: Financial and Trade Shocks
This paper studies the drivers of the US real exchange rate (RER), with a particular focus on its comovement with net trade (NT) flows. We consider the entire spectrum of frequencies, as the low-frequency variation accounts for 62 and 64 percent of the unconditional variance of the RER and NT, respectively. We develop a generalization of the standard international business cycle model that successfully rationalizes the joint dynamics of the RER and NT while accounting for the major puzzles of the RER. We find that, while financial shocks are necessary to capture high frequency variation in ...
Working Paper
The Adjustment of Global External Imbalances: Does Partial Exchange Rate Pass-Through to Trade Prices Matter?
This paper assesses whether partial exchange rate pass-through to trade prices has important implications for the prospective adjustment of global external imbalances. To address this question, we develop an open-economy DGE model in which firms set their prices with an eye toward maintaining their competitiveness against other producers; this feature of the model generates a variable desired markup and, hence, pass-through that is less than complete. With trade price elasticities of unity or greater, we find that for a given move in the exchange rate the nominal trade balance adjusts more ...
The Role of Innovations in Global Trade: The Shipping Container
A simple trade innovation—the use of shipping containers—may have contributed to the rapid expansion of global trade over the past 50 years.