Quotation Badinger, Harald. 2018. Dynamics of the trade balance: in search of the J-curve using a structural gravity approach. XXI Applied Economics Meeting, Alcalá de Henares, Spanien, 07.06.-08.06.




This paper uses a structural gravity approach, specifying currency movements as trade cost component to derive an empirical trade balance model, which incorporates multilateral resistance terms and accounts for the cross‐country variation in the exchange rate pass‐through into import and export prices. The model is estimated using quarterly bilateral trade flows between 47 countries over the period 2010Q1 to 2017Q2, disaggregated into 97 commodity groups. Our results support the existence of an “aggregate” J‐curve, pooled over commodity groups; at the same time they point to considerable heterogeneity in the trade balance dynamics across industries below the surface of aggregate data.


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Status of publication Published
Affiliation WU
Type of publication Paper presented at an academic conference or symposium
Language English
Title Dynamics of the trade balance: in search of the J-curve using a structural gravity approach
Event XXI Applied Economics Meeting
Year 2018
Date 07.06.-08.06.
Country Spain
Location Alcalá de Henares


Badinger, Harald (Details)
Institute for International Economics IN (Details)
Research Institute for European Affairs FI (Details)
Research areas (ÖSTAT Classification 'Statistik Austria')
5115 European integration (Details)
5323 Econometrics (Details)
5335 Political economic theory (Details)
5344 Foreign trade (Details)
5371 Macroeconomics (Details)
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