Price Trends, Economic Growth, and the Canadian Balance of Trade: A Three-Country Model
Journal of Political Economy
1971
The paper undertakes a theoretical analysis and empirical investigation of changes in the Canadian trade balance. The theoretical discussion takes the form of a three-country general equilibrium analysis. In the completed model, changes in the trade balance are the result of variations in real incomes, relative prices, and autonomous international capital flows. The empirical study makes use of a reduced form of the model--a multiple regression equation. The empirical results suggest that (a) a devaluation would lead to an improvement in the trade balance via the price effect; (b) economic expansion has resulted in a deterioration of the trade balance; and (c) long-term capital flows were, on the average, undereffected.
- DOI
- 10.1086/259770
- Volume
- 79 (3)
- Pages
- 596-613
- Language
- en
- Export
- BibTeX
- Sources
- openalex crossref