Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/181547
Authors: 
Giovannini, Massimo
Kollmann, Robert
Ratto, Marco
Roeger, Werner
Vogel, Lukas
Year of Publication: 
2018
Series/Report no.: 
Beiträge zur Jahrestagung des Vereins für Socialpolitik 2018: Digitale Wirtschaft - Session: Open Economy Macroeconomics II No. G15-V3
Abstract: 
The trade balances of the Euro Area (EA) and of the US have improved markedly after the Global Financial Crisis. This paper quantifies the drivers of EA and US economic fluctuations and external adjustment, using an estimated (1999-2017) three-region (US, EA, rest of world) DSGE model with trade in manufactured goods and in commodities. In the model, commodity prices reflect global demand and supply conditions. The paper highlights the key contribution of the post-crisis collapse in commodity prices for the EA and US trade balance reversal. Aggregate demand shocks originating in Emerging Markets too had a significant impact on EA and US trade balances. The broader lesson of this paper is that Emerging Markets and commodity shocks are major drivers of advanced countries’ trade balances and terms of trade.
Subjects: 
EA and US external adjustment
commodity markets
emerging markets
JEL: 
F2
F3
F4
F2
F3
F4
Document Type: 
Conference Paper

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