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Title: |
Cointegration Approach to Estimate the
Long-Run Trade Elasticities in LDCs |
| Author: |
Bahmani-Oskooee,
Mohsen |
| Author
Affiliation: |
U WI, Milwaukee |
| Source: |
International Economic Journal, Autumn 1998, v. 12, no. 3, pp. 89-96 |
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Publication Date: |
Autumn 1998 |
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Abstract: |
The Marshall-Lerner condition postulates
that if the sum of import and export demand elasticities add up to more
than one, devaluation should improve the trade balance in the long-run.
This paper is the first to employ a long-run method, i.e., cointegration
technique to estimate trade elasticities in less develop countries. In
most cases the results reveal that indeed trade elasticities are large
enough to support devaluation as a successful policy to improve the
trade balance. |
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