6533b82efe1ef96bd129451a
RESEARCH PRODUCT
Short-Run Dynamics of the Trade Balance in the EMU-12 Countries
Juha JunttilaMika Nieminensubject
Economics and Econometrics050208 financeEffective exchange rateShort run05 social sciencesBalance of tradeDifferential (mechanical device)International economicsBalance (accounting)Rest (finance)0502 economics and businessPer capitaEconomics050207 economicsdescription
During the pre-EMU period real effective exchange rate or domestic and foreign GDP per capita growth rate differential Granger-caused aggregate trade balance in most of the EMU-12 countries. However, our data-driven paper provides evidence that during the EMU period neither the growth differentials nor the CPI-based real effective exchange rates have Granger-caused the aggregate trade balances. When we decompose the aggregate trade balances into the intra balances (trade balance vis-a-vis the euro area) and the extra balances (trade balance vis-a-vis the rest of the world), we find that typically the change in the dynamics of the aggregate trade balance resulted from a change in the dynamics of the intra balance.
| year | journal | country | edition | language |
|---|---|---|---|---|
| 2016-06-29 | The Manchester School |