Simultaneous causality in international trade

Abstract

"This paper proposes estimating causalities in bilateral international trade in simultaneous systems, including domestic and foreign GDP as well as mutual trade flows. Conventional macroeconomic theory mainly follows partial approaches like import functions or exported growth. Focusing on the US relations with Euroland and Canada, cointegration analyses however reveal, that the system dynamics, and so both im- 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." (Text excerpt, IAB-Doku) ((en))

Cite article

Weber, E. (2007): Simultaneous causality in international trade. (Sonderforschungsbereich Ökonomisches Risiko. Discussion paper 2007-018), Berlin, 7 p.