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How pervasive is the product cycle? The empirical dynamics of American and Japanese trade flows

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  • Joseph E. Gagnon
  • Andrew K. Rose

Abstract

This paper looks for dynamic patterns in international trade flows using multilateral American and Japanese data disaggregated to the four-digit SITC level. Little evidence is found of product-cycle dynamics between 1962 and 1988; rather, goods that begin the sample in surplus (deficit) tend to remain in surplus (deficit) throughout the sample.

Suggested Citation

  • Joseph E. Gagnon & Andrew K. Rose, 1991. "How pervasive is the product cycle? The empirical dynamics of American and Japanese trade flows," International Finance Discussion Papers 410, Board of Governors of the Federal Reserve System (U.S.).
    • Handle: RePEc:fip:fedgif:410
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    References listed on IDEAS

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    1. J. Finger, 1975. "A new view of the product cycle theory," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 111(1), pages 79-99, March.
    2. Grossman, Gene M & Helpman, Elhanan, 1991. "Endogenous Product Cycles," Economic Journal, Royal Economic Society, vol. 101(408), pages 1214-1229, September.
    3. Krugman, Paul, 1979. "A Model of Innovation, Technology Transfer, and the World Distribution of Income," Journal of Political Economy, University of Chicago Press, vol. 87(2), pages 253-266, April.
    4. Raymond Vernon, 1966. "International Investment and International Trade in the Product Cycle," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 80(2), pages 190-207.
    5. Vernon, Raymond, 1979. "The Product Cycle Hypothesis in a New International Environment," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 41(4), pages 255-267, November.
    6. Deardorff, Alan V., 1984. "Testing trade theories and predicting trade flows," Handbook of International Economics, in: R. W. Jones & P. B. Kenen (ed.), Handbook of International Economics, edition 1, volume 1, chapter 10, pages 467-517, Elsevier.
    7. M. V. Posner, 1961. "International Trade And Technical Change," Oxford Economic Papers, Oxford University Press, vol. 13(3), pages 323-341.
    8. Grossman, Gene M & Helpman, Elhanan, 1991. "Endogenous Product Cycles," Economic Journal, Royal Economic Society, vol. 101(408), pages 1214-1229, September.
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    Cited by:

    1. Mika Saito, 2000. "The Empirical Investigation of The Kemp-Jones Model: The Case of OECD Countries," Econometric Society World Congress 2000 Contributed Papers 1159, Econometric Society.
    2. Breuer, Janice Boucher & Clements, Leianne A., 2003. "The commodity composition of US-Japanese trade and the yen/dollar real exchange rate," Japan and the World Economy, Elsevier, vol. 15(3), pages 307-330, August.

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    Keywords

    International trade; Japan;

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