Income Effects on the Trade Balance in the United States: Analysis by Sector

This study examines the causes of the countercyclicality of the trade balance in the three major sectors of the U.S. economy: services, manufacturing, and agriculture. These results are compared with the results pertinent to the U.S. economy as a whole. At the macroscopic level, Sachs’ hypothesis seems to explain the countercyclicality of the trade balance, while results are mixed across individual sectors. The services sector may be explained by Sachs’ hypothesis, while results for the manufacturing sector are more consistent with the real business cycle hypothesis. The results for the agricultural sector, however, cannot be explained by either hypothesis.


Issue Date:
2008-12
Publication Type:
Journal Article
PURL Identifier:
http://purl.umn.edu/47271
Published in:
Journal of Agricultural and Applied Economics, Volume 40, Number 3
Page range:
967-982
Total Pages:
16
JEL Codes:
F4; E32




 Record created 2017-04-01, last modified 2017-08-25

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