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On export performance and export elasticities: A macroeconomic approach

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Summary

In many studies far-reaching conclusions with regard to competitiveness are based upon an export price elasticity that results from only estimating an equation for the volume of exports. The aim of this article is to show with the aid of a macroeconomic model that the influence of competitiveness is overestimated in this way. This conclusion cannot be based on the necessity to introduce the export structure alongside world trade as a regressor in the export equation. The overestimation is a result offeedback mechanisms, greatly resulting from an endogenous exchange rate, which largely neutralize the initial export price effect.

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References

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Authors and Affiliations

  1. University of Amsterdam, Amsterdam, The Netherlands

    Henk Jager

  2. State University of Groningen, Groningen, The Netherlands

    Eelke de Jong

Authors
  1. Henk Jager
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  2. Eelke de Jong
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Additional information

Financial support from the Netherlands organisation for the advancement of pure research (ZWO), no. 46–65, is gratefully acknowledged. The authors thank Prof. S.K. Kuipers for helpful comments and Martin O. Nijkamp and Vincent C.A. Polanen Petel for computational assistance.

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Jager, H., de Jong, E. On export performance and export elasticities: A macroeconomic approach. De Economist 132, 224–231 (1984). https://doi.org/10.1007/BF02380300

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  • DOI: https://doi.org/10.1007/BF02380300

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