TY  - JOUR
AU  - Backus,David K.
AU  - Kehoe,Patrick J.
AU  - Kydland,Finn E.
TI  - Relative Price Movements in Dynamic General Equilibrium Models of International Trade
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 4243
PY  - 1992
Y2  - December 1992
UR  - http://www.nber.org/papers/w4243
L1  - http://www.nber.org/papers/w4243.pdf
N1  - Author contact info:
David Backus
Stern School of Business
NYU
44 West 4th Street
New York, NY 10012-1126
Tel: 212/998-0873
Fax: 212/995-4221
E-Mail: dbackus@stern.nyu.edu

Patrick Kehoe
Research Department
Federal Reserve Bank of Minneapolis
90 Hennepin Avenue
Minneapolis, MN  55480-0291
Tel: 612/204-5525
Fax: 612/204-5515
E-Mail: pkehoe@res.mpls.frb.fed.us

Finn Kydland
Department of Economics
University of California, Santa Barbara
Santa Barbara, CA 93106-9210
Tel: 805/893-5464
Fax: 805/893-8830
E-Mail: kydland@econ.ucsb.edu
AB  - We examine the behavior of international relative prices from the perspective of dynamic general equilibrium theory, with particular emphasis on the variability of the terms of trade and the relation between the terms of trade and net exports. We highlight aspects of the theory that are critical in determining these properties, contrast our perspective with those associated with the Marshall-Lerner condition and the Harberger-Laursen-Metzler effect, and point out features of the data that have proved difficult to explain within existing dynamic general equilibrium models.
ER  -