The effects of surprise and anticipated technology changes on international relative prices and trade

Title
The effects of surprise and anticipated technology changes on international relative prices and trade
Authors
남덕우
Keywords
International transmission of TFP shocks; News shocks; Real exchange rate; Trade balance; Backus-Smith puzzle; Impulse response function matching estimation
Issue Date
2015-05
Publisher
ELSEVIER SCIENCE BV
Citation
JOURNAL OF INTERNATIONAL ECONOMICS, v. 97, NO 1, Page. 162-177
Abstract
This paper argues that it is important to distinguish surprise and anticipated components of total factor productivity (TFP) when we study the international transmission of TFP shocks. We document that surprise and anticipated shocks to US TFP induce distinct dynamics for international relative prices (the real exchange rate and the terms of trade) and international trade (real exports, real imports, and the trade balance). Our empirical findings can reconcile some conflicting empirical results in the literature and hence lead to a better understanding of the international transmission of TFP shocks. In addition, we evaluate a standard international macroeconomic model and discuss the mechanisms that may help to replicate our empirical findings. (C) 2015 Elsevier B.V. All rights reserved.
URI
http://www.sciencedirect.com/science/article/pii/S0022199615000926http://hdl.handle.net/20.500.11754/24387
ISSN
0022-1996; 1873-0353
DOI
http://dx.doi.org/10.1016/j.jinteco.2015.04.009
Appears in Collections:
COLLEGE OF ECONOMICS AND FINANCE[S](경제금융대학) > ECONOMICS & FINANCE(경제금융학부) > Articles
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