The dollar and the U.S. terms of trade

This paper conducts specification tests to explore the dynamic relationship between the dollar and the U.S. terms of trade (TOT), as well as its components, U.S. import and export prices. Here import prices are found to respond to the dollar's value, but only after a substantial lag. Export prices display a somewhat weaker response that appears to partially offset the dollar's effect on import prices, muting its effect on the terms of trade. The result is a weak response in the terms of trade that mimics lags found in the dollar's pass-through into import prices.

The Effects of Exchange Rate Volatility on U.S. Imports: An Empirical Investigation

In this paper we obtain and interpret new estimates of the short- and long-run influence of exchange-rate volatility (or risk) on the import flows of the United States, in the generalized floating exchange-rate period. The major finding is that there is a significant long-run negative effect of exchange-rate volatility on the volume of imports, as well as, a significant short-run negative effect. Therefore, it can be argued that exchange-rate volatility will have significant effects on the allocation of resources by market participants and that policy-makers can no longer rely on an import demand with only conventional variables for long-term international trade planning, forecasting and policy formulation. [F14, F31]

O circuito finance-investimento-poupança- funding em economias abertas

<abstract language="eng">The finance-investment-savings-funding circuit in open economies. On monetary economies the Finance-Investment-Savings-Funding circuit (F-I-S-F) prevails. Investment precedes savings. This circuit was worked out for a closed economy. This study seeks to demonstrate that the circuit F-I-S-F also prevails for open economies. A second point studied in this paper relates the relationship between budget deficits and savings restriction for investment. Conclusions highlight that the circuit F-I-S-F prevails for open economies and that budget deficits do not cause savings restriction for investment. In some situations budget déficits transfer the effects of investment for national savings formation from domestic economy to the rest of the world