Global Imbalances: The Role of Non-TradableTotal Factor Productivity in Advanced Economies

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Author/Editor: Nicoletta Batini, Pietro Cova, Massimiliano Pisani, Alessandro Rebucci
Release Date: © March, 2009
ISBN : 978-1-45187-210-1
Stock #: WPIEA2009063
English
Stock Status: Available

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Description

This paper investigates the role played by total factor productivity (TFP) in the tradable and nontradable sectors of the United States, the euro area, and Japan in the emergence and evolution of today's global trade imbalances. Simulation results based on a dynamic general equilibrium model of the world economy, and using the EU KLEMS database, indicate that TFP developments in these economies can account for a significant fraction of the total deterioration in the U.S. trade balance since 1999, as well as account for some the surpluses in the euro area and Japan. Differences in TFP developments across sectors can also partially explain the evolution of the real effective value of the U.S. dollar during this period.

Taxonomy

Balance of trade , International trade




More publications in this series: Working Papers


More publications by: Nicoletta Batini ; Pietro Cova ; Massimiliano Pisani ; Alessandro Rebucci