Abstract
Hysteresis effects on US external trade, by Philippe Ducos, François Lecointe. In spite of a declining dollar and a return to its 1980 parity in 1987, the US trade deficit has not been eliminated yet. This paper surveys recent trade models which explain hysteresis effects on external trade and presents empirical evidence. It is shown that the use of disaggregated data is crucial to validate the models. It seems that the dollar appreciation has changed the market structure of both the consumer durable goods sector and the capital goods sector. The corresponding theoretical models would be the sunk cost model and demand dynamics model respectively.
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