01842cas a2200253 a 4500 AALejournalIMF007549 230101c9999 xx r poo 0 0eng d 5.00 USD 9781451975048 1018-5941 BD-DhAAL BD-DhAAL Cashin, Paul. Terms of Trade Shocks and the Current Account / Paul Cashin, C. McDermott. Washington, D.C. : International Monetary Fund, 1998. 1 online resource (40 pages) IMF Working Papers <strong>Off-Campus Access:</strong> No User ID or Password Required <strong>On-Campus Access:</strong> No User ID or Password Required Electronic access restricted to authorized BRAC University faculty, staff and students This paper examines the relationship between terms of trade shocks, private saving, and the current account position. The relationship between these variables is theoretically ambiguous: an adverse transitory terms of trade shock can either induce a deterioration or an improvement in the current account, depending on whether the resulting income effects are greater or less than the resulting substitution effects. The substitution effects involve both intertemporally substituting consumption and intratemporally substituting consumption between importables and nontradables. The relative strength of these substitution effects is estimated using data for five OECD countries during 1970/95; both are found to exert large and significant effects on the current account balance. Mode of access: Internet McDermott, C. IMF Working Papers; Working Paper ; No. 1998/177 Full text available on IMF http://elibrary.imf.org/view/journals/001/1998/177/001.1998.issue-177-en.xml IMF e-Library