S-curve dynamics of trade between Sweden and her trading partners

Abstract

The S-curve sums up the dynamic relationship between terms of trade and trade balance. This pattern has received weak support in some developed and less developed countries when aggregate trade data are used. Empirical regularities based on aggregate trade data can be biased since aggregation can potentially suppress some of the patterns observed in trade at the bilateral level. This paper overcomes this problem by employing bilateral trade data from Sweden and finds that the S-curve is invariant to this level of disaggregation. Indeed, Sweden has a bilateral S-curve with 12 out of 17 cases examined for the 1980Q1–2005Q1 period.