Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/183722
Authors: 
Szomolányi, Karol
Lukáčik, Martin
Lukáčiková, Adriana
Year of Publication: 
2016
Citation: 
[Title:] Proceedings of the ENTRENOVA - ENTerprise REsearch InNOVAtion Conference, Rovinj, Croatia, 8-9 September 2016 [ISSN:] 2706-4735 [Volume:] 2 [Pages:] 228-235
Abstract: 
Different theoretical and empirical studies lead to the different results. Different theories suggest a positive as well as a negative relation between the terms-of-trade and trade balance. The traditional Keynesian Harberger-Laursen-Metzler effect of the terms-of-trade on the trade balance is positive. According to the ObsfeldSvensson-Razin effect the positive relation between the terms-of-trade and trade balance is the smaller, the higher a persistence of the terms-of-trade shocks is. The empirical studies do not support statistically significant impact of the terms-of-trade on the output in the developing countries. The goal of the paper is to verify an impact of the terms-of-trade on the Slovak Czech and Croatian business cycles and trade balances. Using the structural vector auto-regression analysis of the terms-oftrade, trade balance, output, consumption and investment cyclical components, we show that the relationship between the terms-of-trade and trade-balance is negative in the Slovak and Czech economy. The relationship between the terms-oftrade and trade-balance is statistically insignificant in the Croatian economy. Termsof-trade shocks explain only small fraction of business cycles in the Slovak, Czech and Croatian economies. Data exhibit Obstfeld-Svensson-Razin effect of the termsof-trade on the trade balance.
Subjects: 
innovation
terms-of-trade
business cycle
Slovak economy
Czech economy
Croatian economy
trade balance
market
JEL: 
C32
E32
F14
Creative Commons License: 
https://creativecommons.org/licenses/by-nc/4.0/
Document Type: 
Conference Paper

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