Trade balance and income shocks: Experience of transition economies

Marcela Veselkova*, Julius Horvath

*Corresponding author for this work

    Research output: Contribution to journalArticlepeer-review

    Abstract (may include machine translation)

    This paper investigates the major sources of changes in the trade balance of four Central European and three Baltic transition economies with an emphasis on the difference between permanent and transitory disturbances to income. In all seven countries the findings support the hypothesis that transitory disturbances to income are the main determinants of changes in the trade balance. These results seem to be fairly consistent with inter-temporal models of trade balance, which view transitory shocks to income as the main source of variations in the trade balance. These results do not seem to support the view that productivity shocks alone generate most of the variation in the trade balance.

    Original languageEnglish
    Pages (from-to)241-249
    Number of pages9
    JournalTransition Studies Review
    Volume15
    Issue number2
    DOIs
    StatePublished - Sep 2008

    Keywords

    • Trade balance
    • Transition economies
    • Transitory and permanent shocks

    Fingerprint

    Dive into the research topics of 'Trade balance and income shocks: Experience of transition economies'. Together they form a unique fingerprint.

    Cite this