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P. R. Krugman and R. E. Baldwin, “The Persistence of the US Trade Deficit,” Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, 1987, pp. 1-56.

has been cited by the following article:

• TITLE: Stationary Vector Autoregressive Representation of Error Correction Models

  AUTHORS: Yun-Yeong Kim

  KEYWORDS: VAR Model; Cointegration; Error Correction Model; Stationary VAR

  JOURNAL NAME: Theoretical Economics Letters, Vol.2 No.2, May 23, 2012

  ABSTRACT: The paper introduces a stationary vector autoregressive (VAR) representation of the error correction model (ECM). This representation explicitly regards the cointegration error a dependent variable, making the direct implementation of standard dynamic analyses using standard VAR models possible, particularly with respect to the cointegration error. Of course, an ECM does not have an explicit VAR form, and thus, it is not convenient for conducting such dynamic analyses. In this regard, we transform the original nonstationary VAR model into a VAR model with the cointegration error and stationary variables. Finally, we employ the model to dynamically analyze the real exchange rate between the US dollar and the Japanese yen.