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Trade Elasticities: A Final Report for the European Commission

Jean Imbs, Isabelle Méjean

Trade Elasticities: A Final Report for the European Commissionpdf(385 kB) Choose translations of the previous link 

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In a demand system with conventional CES preferences, the price elasticitites of aggregate trade flows are weighted averages of sector-specific elasticities of substitution. We describe a methodology that can be used to estimate country-specific values for the price elasticities of aggregate imports and exports. We first use disaggregated trade data to compute structural estimates of international substitutability for a large cross section of countries. We aggregate up the estimates using model-implied, country-specific weights. We obtain structural estimates of the price elasticities of aggregate exports and imports for more than 30 countries, including most developed and developing economies.

(European Economy. Economic Papers. 432. December 2010. Brussels. PDF. 41pp. Tab. Graph. Bibliogr. Free.)

KC-AI-10-432-EN-N (online)
ISBN 978-92-79-14918-4 (online)
ISSN 1725-3195
doi:10.2765/46193 (online)

JEL classification: F32, F02, F15, F41

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