Simultaneous causality in international trade

Abstract

"Conventional macroeconomic trade theory and empirics mainly follow partial approaches like import functions or export-led growth. In contrast, this paper proposes estimating causalities in bilateral international trade in simultaneous systems, including domestic and foreign GDP as well as mutual trade flows. Focusing on the US relations with Euroland and Canada, cointegration analyses surprisingly reveal that the system dynamics, and so both imports and exports are simply governed by US GDP shocks. In conclusion, exploring sources and effects of international trade should be seen as an inherently empirical task." (Author's abstract, IAB-Doku) ((en))

Cite article

Weber, E. (2009): Simultaneous causality in international trade. In: The empirical economics letters, Vol. 8, No. 12, p. 1217-1224.