Year: 2011
Type: report
Abstract: We examine the source of the large fall and rebound in U.S. trade in the recent reces- sion.While trade fell and rebounded more than expenditures or production of traded goods, we find that relative to the magnitude of the downturn, these trade fluctuations were in line with those in previous business cycle fluctuations.We argue that the high volatility of trade is attributed to more severe inventory management considerations of firms involved in international trade.We present empirical evidence for autos as well as at the aggregate level that the adjustment of inventory holdings helps explain these fluctuations in trade.(JEL E31, F12)
Source: Working paper
Institution: Federal Reserve Bank of Philadelphia
Language: English
Topic: Global trade and economics
Domain: Social Sciences
Open Access status: bronze
OpenAlex ID: W3122045936