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Download or read book Relative Price Movements in Dynamic General Equilibrium Models of International Trade written by David Backus and published by . This book was released on 1992 with total page 68 pages. Available in PDF, EPUB and Kindle. Book excerpt: 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.