Supply Pressure and the Export-Import Performance in the Japan-U.S. Bilateral Trade

Download or read book Supply Pressure and the Export-Import Performance in the Japan-U.S. Bilateral Trade written by Yusuke Onitsuka and published by International Monetary Fund. This book was released on 1994-05-01 with total page 22 pages. Available in PDF, EPUB and Kindle. Book excerpt: The paper examines the effects of the supply pressure of the exports in the Japan-U.S. bilateral trade. A simultaneous equation approach with a Almon lag structure is adopted. Two factors of supply pressure, i.e., full-employment capacity and inventory are specified, and positively-sloped export supply functions with these two shift factors are successfully estimated. While capacity is positively correlated with exports, the inventory is often negatively correlated. It is also shown that export supply pressure is much stronger in Japan’s exports than in the U.S. exports, and that supply pressure often affects exports with a lag structure spreading over twelve quarters.