Series: IMF Working Papers
Author(s): Yi Wu
Publisher: INTERNATIONAL MONETARY FUND
Publication Date: 01 January 2005
Keywords: Income elasticity, Houthakker-Magee effect, 45-degree rule, income elasticities, equations, statistics, cointegration, import demand,
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...