Buy this book
![Loading indicator](/images/ajax-loader-bar.gif)
"The national terms of trade, defined as the ratio of an export price index to an import price index has been extensively studied empirically. In this paper we construct an alternative measure, which we call the consumption terms of trade. This measure recognizes the fact that consumers and firms face different prices for the same items and consume different items. Using micro-data from the Economist Intelligence Unit at the retail level, we conduct a forensic analysis of the variation of the terms of trade of 38 countries. Using a novel variance decomposition method, we find that the bulk of terms of trade variation is accounted for by oil, automobiles and medicine. The other goods in our construct tend to exhibit balanced trade, providing a natural hedge against world price fluctuations. We find the consumption terms of trade at local prices is more volatile than at world prices, but the two are strongly positively correlated. The same commodities dominate the variance decomposition in both constructs, but variance shifts from oil to medicine, when local prices are used, presumably due to larger LOP deviations in the latter than the former. The significant differences in time paths of producer (conventional) and consumer terms of trade suggests the need to adapt the elasticities approach to trade balance adjustment to recognize different prices and baskets at the consumer and producer level"--National Bureau of Economic Research web site.
Buy this book
![Loading indicator](/images/ajax-loader-bar.gif)
Showing 1 featured edition. View all 1 editions?
Edition | Availability |
---|---|
1
The consumption terms of trade and commodity prices
2009, National Bureau of Economic Research
Electronic resource
in English
|
aaaa
|
Book Details
Edition Notes
Title from PDF file as viewed on 12/29/2009.
Includes bibliographical references.
Also available in print.
System requirements: Adobe Acrobat Reader.
Mode of access: World Wide Web.
Classifications
The Physical Object
ID Numbers
Source records
Community Reviews (0)
Feedback?October 29, 2020 | Edited by MARC Bot | import existing book |
February 11, 2019 | Created by MARC Bot | import existing book |