Reinhart, Carmen and Ostry, Jonathan (1991): Private Saving and Terms of Trade Shocks. Published in: IMF Staff Papers , Vol. 3, No. 39 (September 1992): pp. 495-517.
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This paper examines the relationship between temporary terms of trade shocks and household saving in developing countries. It is first shown that, from a theoretical standpoint, this relationship is ambiguous: private saving may rise or fall in response to a transitory terms of trade shock, depending on the values of the intertemporal elasticity of substitution and the intratemporal elasticity of substitution between traded and nontraded goods. Empirical estimates of these two parameters are obtained using data from a sample of 13 developing countries, and then used to draw implications for the response of private saving to transitory terms of trade shocks.
|Item Type:||MPRA Paper|
|Original Title:||Private Saving and Terms of Trade Shocks|
|Keywords:||traded and nontraded goods consumption real interest rates current account|
|Subjects:||F - International Economics > F3 - International Finance > F30 - General
F - International Economics > F1 - Trade > F10 - General
E - Macroeconomics and Monetary Economics > E2 - Macroeconomics: Consumption, Saving, Production, Employment, and Investment > E20 - General
|Depositing User:||Carmen Reinhart|
|Date Deposited:||03. Mar 2009 08:44|
|Last Modified:||18. Feb 2013 03:27|
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