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The price elasticity of external demand: how does Portugal compare with other euro area countries?

Cristina Manteu and Sonia Cabral (scabral@bportugal.pt)

Working Papers from Banco de Portugal, Economics and Research Department

Abstract: This paper estimates the price elasticity of external demand of Portuguese exports in the period 1995-2009 and compares it with those of other euro area countries. This proxy of the export price elasticity is computed as a weighted average of the import demand elasticities in each individual country-product destination market, using the elasticities of substitution across imported varieties of Broda et al. (2006). Overall, Portugal tends to export to individual markets which have, on average, a lower price elasticity than the markets where other euro area countries export to. Therefore, the product and geographical composition of Portuguese exports reduces their exposure to relative price fluctuations.

JEL-codes: F12 F14 (search for similar items in EconPapers)
Date: 2011
New Economics Papers: this item is included in nep-int
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Citations: View citations in EconPapers (2)

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Persistent link: https://EconPapers.repec.org/RePEc:ptu:wpaper:w201127

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