A Global Trade Model for the Euro Area

By Federal Reserve Board

We propose a model for analyzing euro area trade based on the interaction betweenmacroeconomic and trade variables. First, we show that macroeconomic variables arenecessary to generate accurate short-term trade forecasts; this result can be explainedby the high correlation between trade and macroeconomic variables, with the latterbeing released in a more timely manner. Second, the model tracks well the dynamicsof trade variables conditional on the path of macroeconomic variables during the greatrecession; this result makes our model a reliable tool for scenario analysis. Third, wequantify the contribution of the most important euro area trading partners (regions)to the aggregate extra euro area developments: we evaluate the impact of an increaseof the external demand from a specific region on the extra euro area trade.

• Format: Paperback
• Language: English
• ISBN: 1511660511
• ISBN13: 9781511660518
• Release Date: April 2015
• Publisher: Createspace Independent Publishing Platform
• Length: 36 Pages
• Weight: 0.24 lbs.
• Dimensions: 0.1" x 8.5" x 11.0"