Econometric Research in International Trade

This book is concerned with applying the theory of international trade and international capital movements to historical monthly data on external and internal prices, in order to study the mode of international transmission of price changes at a fairly detailed level of disaggregation of commodities into some 20 or 30 groups.

The data used are from the few countries that have long series of monthly price indices, such as Germany and Sweden as well as Korea.

The econometric methodology includes the estimation of distributed lags and the methodology of optimal aggregation of commodities into groups.

The book combines the knowledge of many-commodity many-factor theory of international trade along the Lerner-Samuelson line with the knowledge of econometric techniques such as distributed-lag estimation and optimal aggregation.

Major topics addressed include the role of intra-industry trade and the effects of international capital movements on sectoral prices.