Imports and Exports

Over the past thirty years there has developed a large body of empirical work attempting to determine not only which variables influence international trade patterns but also their quantitative impact. The motivation for this work is clear: it is needed to form a basis for forecasting the effects of exchange-rate variations, changes in tariff structures and for tracing the international propagation of business cycles. The emphasis has been placed on determining the role of the international price mechanism on the one hand, and the effect of income changes throughout the world on the other.