International Journal of Management and Economics

authors
Brian D Fitzpatrick, Michael M Tansey, Sudhakar Raju

abstract
The U.S. Export Import Bank (EXIM Bank) has followed congressional mandates which were unwound when Congress financially constrained these mandates in 2015. In 2015 the EXIM Bank is shown to have followed its mandates to expand exports, lower the trade deficit, and lower country risk. From these mandates a model of EXIM Bank decisions is formulated and formatted from the basis of a Gravity equation for U.S. exports. Three “symmetric” properties of such gravity models are tested and confirmed for the EXIM Bank: (1) a negative elasticity with respect to foreign population, (2) an elasticity with respect to foreign income above 1.0. and (3) a unitary sum of two elasticities. The EXIM Bank’s financial exposure mimicked the gravity model of U.S. trade, reflecting these three properties until the congressional constraint of 2015 interrupted agency behavior.