Hidden Bibliographic Details
| Other authors / contributors: | International Monetary Fund. Policy Development and Review Department, issuing body.
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| ISBN: | 1282027905
9781282027909
1451905661
9781451905663
1462397263
9781462397266
1452703760
9781452703763
9786613796615
6613796611
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| ISSN: | 2227-8885
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| Notes: | Includes bibliographical references (pages 21-24).
Restrictions unspecified
Electronic reproduction. [S.l.] : HathiTrust Digital Library, 2010.
Master and use copy. Digital master created according to Benchmark for Faithful Digital Reproductions of Monographs and Serials, Version 1. Digital Library Federation, December 2002. http://purl.oclc.org/DLF/benchrepro0212
English.
digitized 2010 HathiTrust Digital Library committed to preserve
Print version record.
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| Summary: | The Houthakker-Magee effect implies that a country facing unfavorable income elasticities in trade must either grow at a slower rate than its trading partners or experience a trend worsening of its current account and/or depreciation of its real exchange rate. Krugman (1989) first documented the existence of a "45-degree rule" under which relative income elasticities are systematically related to relative growth rates. In this paper, we develop and test an intertemporal current account model in which Krugman's original 45-degree rule is a special case. The result suggests that secular trends in current accounts and/or real exchange rates are much smaller than one would have projected based on conventional income elasticities.
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| Other form: | Print version: Wu, Yi. Growth, expansion of markets, and income elasticities in world trade. [Washington, D.C.] : International Monetary Fund, ©2005
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| Standard no.: | 10.5089/9781451905663.001
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