This paper investigates the determinants of the trade balance using panel data for 32 industrialized and emerging economies for the period 1990?2007. The results based on fixed effects models and linear mixed models allowing for random slope coefficients, show that the trade balance as a...

This paper uses an intertemporal optimizing model of a small open economy to analyze how terms of trade changes affect real exchange rates and the trade balance. We consider temporary current, anticipated future, and permanent changes in the terms of trade. The results suggest that the...

We estimate a three-region (DE-REA-RoW) structural macroeconomic model, and we provide a counterfactual on how nominal exchange rate flexibility would have affected the German trade balance (TB) by simulating the shocks of the estimated model under a counterfactual flexible exchange rate regime....

Fluctuations in exchange rate have threatened the stability of global financial system and have invited unwarranted currency war. South Asia has been experiencing a whopping trade deficit from the last many years. This study is an attempt to analyze the impact of exchange rate depreciation on...