Richard L. Sprinkle

The demand for imports and exports in the U.S.: A survey

One of the more important issues in applied international economics is the extent to which trade flows adjust to changes in income, relative prices, and exchange rates. In this paper, the literature on the empirical estimation of the demand for imports and exports for the U.S. is surveyed. More precisely, this paper updates earlier surveys by Stern, Francis, and Schumacher (1976) and Goldstein and Khan (1985).

An Empirical Examination of the Structural Stability of Disaggregated U.S. Import Demand

We present three related types of evidence on U.S. import demand. First, aggregate import demand is reestimated for comparison with previous research. Second, we provide updated estimates of import demand for five economic classes: crude foods, crude materials, manufactured foods, semi- manufactures, and finished manufactures. Finally, each of these import demand functions is tested for any evidence of structural instability, and in those cases where instability is detected, the demand equations are reestimated along the lines suggested by the stability tests. Copyright 1989 by MIT Press.

The Adjustment of Canadian Import Demand to Changes in Income, Prices, and Exchange Rates

This paper provides estimates of the sensitivity of Canadian import demand to changes in income, prices, and exchange rates. The model specification allows for the consideration of long-run elasticities as well as the dynamics of short-run adjustment of imports to changes in these variables. The estimated long-run elasticities obtained are similar to those in previous studies. It is also shown that Canadian imports react quickly to changes in either foreign or domestic prices, but that the reaction to changes in exchange rates is much slower.

Latin American trade elasticities

An important issue in applied international economics is the extent to which trade flows adjust to changes in income, relative prices, and exchange rates. While there have been numerous surveys regarding merchandise trade elasticities in industrial economies such as Japan and the United States, relatively little work has been completed with respect to developing regions of the world. Material in this article examines the literature on empirical estimates of import and export elasticities published for Latin America. (JEL F140)

Alternative empirical estimates of trade creation and trade diversion: A comparison of the Baldwin-Murray and Verdoorn models

ZusammenfassungAlternative empirische SchÄtzungen von Handelsschaf-fung und Handelsumlenkung. Ein Vergleich der Modelle von Baldwin-Murray und von Verdoorn. - In diesem Aufsatz werden die Eigenschaften zweier Modelle untersucht, die üblicherweise benutzt werden, um ex ante Handelsschaffung und Handelsumlenkung zu schÄtzen. Die Analyse zeigt, da\ beide Modelle hinsichtlich der Handelsschaf-fung zu identischen Ergebnissen führen. Im Fall der Handelsumlenkung dagegen können die SchÄtzungen je nach dem benutzten Modell differieren, was damit zusammenhÄngt, da\ unterschiedliche Annahmen über das Ausma\ der Substituierbarkeit von Importen aus begünstigten und aus nicht begünstigten LÄndern gemacht werden. Die Unterschiede in den SchÄtzungen werden anhand eines empirischen Beispiels untersucht. Au\erdem wird gezeigt, da\ bei Benutzung der Verdoornschen Annahmen das Ausma\ der Handelsumlenkung auch ohne ausdrückliche Kenntnis der SubstitutionselastizitÄt geschÄtzt werden kann.RésuméEstimations alternatives empiriques de la création et du détournement de commerce: une comparaison des modèles de Baldwin-Murray et Verdoorn. - Cet article analyse le caractère de deux modèles normalement utilisés pour estimer ex ante la création et le détournement de commerce. L’analyse indique que les deux modèles produisent des estimations identiques en ce qui concerne la création de commerce. Cependant, à cause des suppositions un peu différentes concernant le degré de la substitutabilité entre les importations des pays préférés et non-préférés, les estimations du détournement de commerce peuvent différer selon le modèle utilisé. Puis ces différences sont examinées en appliquant un modèle empirique. Il est aussi démontré que le détournement de commerce peut Être estimé sans savoir explicitement les élasticités de substitution si l’on applique le modèle de Verdoorn.ResumenEstimaciones empiricas alternativas de la creación y desviación del comercio: una comparación del modelo de Baldwin y Murray con el de Verdoorn. - En este trabajo se analizan las propiedades de dos modelos comÚnmente utilizados para estimar ex ante la creación y desviación del comercio. Empero, debido a supuestos ligeramente diferentes en relación al grado de sustitutabilidad entre importaciones de países preferidos y no preferidos, las estimaciones de la desviación del comercio pueden diferir dependiendo del modelo utilizado. Estas diferencias son examinadas en un ejemplo empírico. También se muestra que la desviación del comercio puede ser estimada con los supuestos de Verdoorn, mas sin conocimento explícito de la elasticidad de sustitución.

Regional Exchange Rate Indexes for the United States

In this paper we construct exchange rate indexes for the nine U.S. Bureau of the Census regions. The results indicate there are nontrivial differences between them and an identically created overall U.S. exchange rate index. The national index is cointegrated with only two of these regional indexes, and in a Granger sense, it is causing one regional index. In addition, our results indicate that two of the regional exchange rate indexes are interchangeable with the national index. These results show that researchers investigating how exchange rate changes affect regional exports or regional economic growth should be cautious in making inferences based upon a national exchange rate index.

The effects of exchange rate changes on prices and quantities in U.S. foreign trade

The recent devaluation of the dollar has had a puzzlingly slow effect on the U.S. merchandise trade balance. This article examines the effects of exchange rate changes on U.S. import and export prices and then examines the effects of price changes on trade flows. Estimates are developed for aggregate imports and exports and aggregate imports and exports minus crude materials and crude foods. It appears that exports respond much more quickly than imports to exchange rate fluctuations. Specifically, it may take up to three years for a real exchange rate change to fully affect the quantity of imports. These results seem more consistent with recent experience than the results of standard single-equation models which tend to indicate a much shorter lag from exchange-rate changes to changes in trade flows.

Intra-Industry Trade in Latin America and the Caribbean

An increasingly important component of total world trade is intra-industry trade (IIT). The large volume of literature on IIT is reflective of this importance. However, this extensive literature has focused almost completely on explaining the causes of IIT. This focus has left a puzzling gap in the literature. Specifically, it is almost impossible to determine the level of IIT for a particular country or region. Further, there is almost no information on the level of IIT at the industry level either globally or for a region or country. In this article we provide estimates of IIT for the world and for the countries of the Western Hemisphere. Further, we provide estimates of IIT for ten different SITC product categories on the same basis. The findings of the article indicate that in most industries, IIT in Latin America is substantially lower overall than the world average. There are, however, substantial variations observed both by country and by industry. Because the results are the first available for the region as a whole, they should allow researchers to get a better picture of the extent of IIT in Latin America and the Caribbean by country and by industry.

The effects of Mexico's devaluations and tariff changes on U.S. exports

Abstract The recent economic crisis in Mexico has been accompanied by several devaluations of the peso and a change in Mexicos tariff schedule. With Mexico being the third largest trading partner of the U.S. any serious disruption of this trade flow could significantly affect U.S. exports. This article presents estimates of the decline in U.S. exports in total and by industry. In total, the decline amounts to approximately

Openness and industrialization in developing countries

4.5 billion or a reduction in U.S. exports to Mexico of 31 percent. In addition, it is shown that approximately 40 percent of this total reduction in U.S. exports occurs in 15 product categories with 4 product categories accounting for about one-fifth of the total reduction. As is evident, only a few industries will bear a large percentage of the decline in U.S. exports to Mexico.