Dissecting the Effects of Terms of Trade Shocks on the Korean Economy

Choi, Jinho; Hur, Joonyoung; Kang, Manho

doi:10.1080/1540496x.2016.1174686

Cited by 2 publications

(1 citation statement)

References 14 publications

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“…His results show that terms-of-trade movements do not affect the current account in a significant way. Choi, Hur and Kang ( 2017) analyze the effects of terms of trade shocks in the Korean economy. They discuss that although the shock deteriorates the terms of trade (TOT), it is clearly associated with an expansionary effect on output, which is more pronounced at longer horizons.…”

Section: Literature Reviewmentioning

confidence: 99%

Is Harberger-Laursen-Metzler Hypothesis valid in Turkey

Uçan¹,

Ünal²

2018

Pressacademia

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Purpose-In so far as financial development that supports the supply-side view as well as the country's competitiveness, a rapid increase in import price index in comparison to the export price index brings forth the deterioration regarding trade. A similar case also exists in Turkey. The aim of the study is to test the relationship between foreign trade balance and terms of trade in Turkey. Methodology-In this study, the monthly data of terms of trade and foreign trade balance for the period 2005: M1 -2017: M4 are analyzed for Turkey, and the validity of Harberger-Laursen-Metzler Hypothesis is tested. Findings-The deviations in the short run converge to the long-term equilibrium in approximately 6 months period. In addition, considering the normalized long-term relationship, the 1-unit increase in the terms of trade would cause an average increase of $ 321,335 in the estimated dependent variable, namely, the foreign trade balance. Conclusion-There exists a long-term relationship between the variables, namely, terms of trade and foreign trade balance. Moreover, there is a short-term unilateral causality from foreign trade balance to terms of trade.

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Section: Literature Reviewmentioning

confidence: 99%