Using a dataset of 101 countries over the 1960–2011 period, we examine the relationship between the real effective exchange rate (REER), on the one hand, and trade openness, trade balance, the terms of trade, factor productivity, and exchange rate regime, on the other one. We use new...

This paper empirically analyzes the long-run equilibrium between trade balances and the terms of trade using the nonstationary panel data analysis. Empirical results indicate that trade balances and the terms of trade do not have cointegrating relation for G-7 countries. This implies that the...

This study assesses the response of the trade balance to exchange rate fluctuations across a large number of countries. Fixed-effects regressions are estimated for 87 countries on annual data from 1994 to 2010. The trade balance improves significantly after a real depreciation, and to a similar...