The challenging estimation of trade elasticities: Tackling the inconclusive Eurozone evidence

Sascha Keil (sascha.keil@wirtschaft.tu-chemnitz.de)
Additional contact information
Sascha Keil: Chemnitz University of Technology

No 261, Departmental Working Papers of Economics - University 'Roma Tre' from Department of Economics - University Roma Tre

Abstract: This paper sheds light on serious methodological difficulties of employing the empiric export equation in order to derive long-run trade elasticities. The unreliable estimated price coefficient (Kaldor Paradox) and the potential presence of cointegration are identified as the most relevant points. It can be shown that difficulties are in part due to methodological issues. New empirical evidence, encompassing eleven Euro area countries and the timespan 1995– 2019, has been obtained from different cointegration techniques. In seven out of eleven cases a robust long-run relationship can be detected and price elasticity was consistently found being significant and negative.

Keywords: International trade; Competitiveness; Kaldor Paradox; Export equation; ARDL (search for similar items in EconPapers)
JEL-codes: C13 F14 (search for similar items in EconPapers)
Pages: 34
Date: 2021-06
New Economics Papers: this item is included in nep-eec, nep-int and nep-isf
References: Add references at CitEc
Citations:

Published

Downloads: (external link)
https://economia.uniroma3.it/ricerca/pubblicazioni/working-papers/ (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:rtr:wpaper:0261

Access Statistics for this paper

More papers in Departmental Working Papers of Economics - University 'Roma Tre' from Department of Economics - University Roma Tre Via Silvio d'Amico 77, - 00145 Rome Italy. Contact information at EDIRC.
Bibliographic data for series maintained by Telephone for information (dip_eco@uniroma3.it).