Doomed to Deficits? Aggregate U.S. Trade Flows Re-Examined

Chinn, Menzie David

Download This Paper

Open PDF in Browser

Add Paper to My Library

Doomed to Deficits? Aggregate U.S. Trade Flows Re-Examined

NBER Working Paper No. w9521

38 Pages Posted: 4 Mar 2003 Last revised: 9 Jul 2022

See all articles by Menzie David Chinn

Menzie David Chinn

University of Wisconsin, Madison - Robert M. La Follette School of Public Affairs and Department of Economics; National Bureau of Economic Research (NBER)

There are 3 versions of this paper

Date Written: March 2003

Abstract

This paper examines the stability of import and export demand functions for the United States over the 1975q1-2001q2 period. Using the Johansen maximum likelihood approach, an export demand function is readily identified. In contrast, there appears to be a structural break in the import demand function in 1995; specifications incorporating this break pass tests for cointegration, although the price elasticity is not statistically significant. Only when excluding computers and parts from the import series is a stable import demand function detected. The resulting point estimates do not exhibit the income asymmetry typically found in other studies of aggregate U.S. trade flows.

Suggested Citation: Suggested Citation

Chinn, Menzie David, Doomed to Deficits? Aggregate U.S. Trade Flows Re-Examined (March 2003). NBER Working Paper No. w9521, Available at SSRN: https://ssrn.com/abstract=384243