Rolling Estimation of Contribution of Domestic-Foreign Income Growth Differential to Real Trade Balance Adjustment
Citation: IMF Working Papers 2019, 131; 10.5089/9781498312738.001.A001Notes: Estimates of income elasticities are obtained from 42 quarter (around 10.5 years) rolling window. The date labels show the end period of each rolling window. Values below the 45-degree line indicate that domestic-foreign income growth differential would contribute to the narrowing of the real trade balance (Equation (10)). Export-to-import ratio is calculated for each quarter and then averaged over the rolling window. The growth rates of domestic and foreign income are the quarter-on-same quarter of previous year averaged over the rolling window.