Productive capacity, product varieties, and the elasticities approach to the trade balance
By: Joseph E. Gagnon.
Series: International finance discussion papers ;; no. 781; International finance discussion papers (Online) ;; no. 781.
Publisher: Federal Reserve Board
Published: 2003
Place of publication: Washington, D.C
Language: eng
Format: Electronic resource
Description: "Most macroeconomic models imply that faster output growth tends to lower a country's trade balance by raising its imports with little change to its exports.  Krugman (1989) proposed a model in which countries grow by producing new varieties of goods.  In his model, faster-growing countries are able to export these new goods and maintain balanced trade without suffering any deterioration in their terms of trade.  This paper analyzes the growth of U.S. imports from different source countries and finds strong support for Krugman's model"--Federal Reserve Board web site.
Notes: Also available in print.
Includes bibliographical references.
Title from PDF file as viewed on 9/14/2004.
System requirements: Adobe Acrobat Reader.
Mode of access: World Wide Web.