THE AGGREGATE OF ELASTICITIES OR THE ELASTICITY OF THE AGGREGATES: U.S. TRADE IN SERVICES

Jaime Marquez

No 142, Computing in Economics and Finance 2005 from Society for Computational Economics

Abstract: I use the automated search algorithm to address practical issues that arise in estimating income and price elasticities for U.S. trade in services: specification of dynamics, specification of the search strategy, simultaneity biases, and aggregation biases. Specifically, starting from a general, autoregressive distributed lag formulation, I use automated specification algorithms to obtain a specific formulation. I assess simultaneity biases by applying OLS, IV, and FIML. I assess aggregation biases by comparing the aggregate of the elasticities to the elasticity of the aggregate. Ignoring these considerations results in a formulation that cannot explain the divergence of service and merchandise balances

Keywords: Automated Search; Simultaneity and Aggregation Bias (search for similar items in EconPapers)
JEL-codes: C51 F41 (search for similar items in EconPapers)
Date: 2005-11-11
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:sce:scecf5:142

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