Front Matter Page
Research Department
Authorized for distribution by Andrew Berg
Contents
I. Introduction
II. The Model
A. Assumptions
B. Model Solution
C. Sensitivity of Elasticities to Parameter Values
III. Calculation of Elasticities
IV. Computing Elasticities of a Country’s Trade Balance With Respect to a Change in the Exchange Rate
A. The Trade Balance and the Real Exchange Rate
B. Special Cases
C. Price Elasticities and the Real Exchange Rate
V. Some Extensions
A. Imperfect Competition
B. Less than Perfect Labor Mobility
VI. Conclusion
References
Appendix
Tables
Table 1. Import Demand Elasticities
Table 2. Export Supply Elasticities
Table 3. Summary of How Changes in the Exchange Rate Affect the Trade Balance
Table 4. Trade Balance Elasticities