On the connections between intra-temporal and intertemporal trades

• 成果类型: Article; Proceedings Paper
• 署名作者: Ju, Jiandong; Shi, Kang; Wei, Shang-Jin
• 署名单位: Tsinghua University; University of Oklahoma System; University of Oklahoma - Norman; Chinese University of Hong Kong; Columbia University; National Bureau of Economic Research
• 刊物名称: JOURNAL OF INTERNATIONAL ECONOMICS
• ISSN/ISSBN: 0022-1996
• DOI: 10.1016/j.jinteco.2013.11.010
• 发表日期: 2014
• 页码: S36-S51
• 关键词: current account; Intertemporal trade; Intra-temporal trade; Labor market rigidity

摘要

This paper develops a new theory of international economics by introducing Heckscher-Ohlin features of intra-temporal trade into an intertemporal trade approach of current account. To do so, we consider a dynamic general equilibrium model with tradable sectors of different factor intensities, which allows for substitution between intertemporal trade (current account adjustment) and intra-temporal trade (goods trade). An economy's response to a shock generally involves a combination of a change in the composition of goods trade and a change in the current account. Flexible factor markets reduce the need for the current account to adjust. On the other hand, the more rigid the factor markets, the larger the size of current account adjustment relative to the volume of goods trade, and the slower the speed of adjustment of the current account towards its long-run equilibrium. We present empirical evidence consistent with the theory. (C) 2013 Elsevier B.V. All rights reserved.