Gagnon, Joseph E. - Federal Reserve Board (Board of Governors of the … - 2004
of Helpman and Krugman (1985), providing a basis for growth-led exports without declining terms of trade. The key … and X*
represents imports (exports from the rest of the world). Asterisks denote foreign variables. The
subscripts … balance through higher imports that are not matched by higher exports, at
least not without a permanent decline in the terms …