Terms-of-Trade Shocks are Not All Alike

Terms of trade are an inaccurate empirical proxy for how fluctuations in international prices affect the economy. To capture the relevance of terms of trade fluctuations for the domestic business cycle, the role of export and import prices needs to be analyzed separately. Using a sample of developing economies, we find that the economy’s response to a positive export price shock does not mirror the response to a negative import price shock. (JEL E23, E32, E43, F14, F44, O11)

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Publication Details

Journal
American Economic Journal Macroeconomics
Published
2025-03-28
DOI
https://doi.org/10.1257/mac.20220035
Citations
4
Primary Topic
Global Financial Crisis and Policies
Type
article
Field-Weighted Citation Impact
8.83
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article

Terms-of-Trade Shocks are Not All Alike

Luciana Juvenal, Iván Petrella, Federico Di Pace
4 citations
American Economic Journal Macroeconomics
Global Financial Crisis and Policies
8.83
article

Terms-of-Trade Shocks are Not All Alike

Luciana Juvenal, Iván Petrella, Federico Di Pace
article en
4 citations

Abstract

Terms of trade are an inaccurate empirical proxy for how fluctuations in international prices affect the economy. To capture the relevance of terms of trade fluctuations for the domestic business cycle, the role of export and import prices needs to be analyzed separately. Using a sample of developing economies, we find that the economy’s response to a positive export price shock does not mirror the response to a negative import price shock. (JEL E23, E32, E43, F14, F44, O11)

American Economic Journal MacroeconomicsVol. 17(2)
International Monetary Fund (US), Collegio Carlo Alberto (IT), University of Warwick (GB), Centre for Research in Engineering Surface Technology (IE), Centre de Recherche en Économie et Statistique (FR), Center for Responsible Travel (US), Bank of England (GB)
Openalex Percentile: Top 3%
Global Financial Crisis and Policies
8.83
DOISourceOpenAlex
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Terms-of-Trade Shocks are Not All Alike — Luciana Juvenal, Iván Petrella, et al. · American Economic Journal Macroeconomics (2025) | TGRS Research Map | TGRS