TY  - JOUR
AU  - Backus,David K.
AU  - Crucini,Mario J.
TI  - Oil Prices and the Terms of Trade
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 6697
PY  - 1998
Y2  - August 1998
UR  - http://www.nber.org/papers/w6697
L1  - http://www.nber.org/papers/w6697.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

Mario J. Crucini
Department of Economics
Vanderbilt University
Box 1819 Station B
Nashville, TN 37235-1819
Tel: 615/322-7357
Fax: 615/343-8459
E-Mail: mario.j.crucini@vanderbilt.edu
AB  - The combination of substantial terms of trade variability and unstable correlation patterns of trade prices with output and trade volumes has led some to suggest a break in the link between trade volumes and prices.  We find that oil accounts for much of the variation in the terms of trade over the last twenty five years and its quantitative role varies significantly over time. And since our dynamic general equilibrium model predicts that the economy responds differently to oil supply shocks than to other shocks, changes in their relative importance help to account for the unstable correlations in the data.
ER  -