Is there a role for domestic demand pressure on export performance?

Paulo Esteves and António Rua

Empirical Economics, 2015, vol. 49, issue 4, 1173-1189

Abstract: Traditionally, exports behavior is modeled only as a function of the foreign demand and the real exchange rate. However, it is by now widely acknowledged that these variables are not able to fully explain exports developments. This paper suggests considering domestic demand pressure as an additional variable, revisiting its economic rationale and assessing its empirical importance. In particular, we consider the Portuguese case and find that domestic demand developments are relevant for the short-run dynamics of exports. Moreover, it is found that this relationship is asymmetric, being stronger and more significant when domestic demand is falling than when it is increasing. Copyright Springer-Verlag Berlin Heidelberg 2015

Keywords: Exports; Domestic demand pressure; Error correction models; Asymmetry; C22; C50; F10 (search for similar items in EconPapers)
Date: 2015
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Citations: View citations in EconPapers (32)

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Working Paper: Is there a role for domestic demand pressure on export performance? (2013)
Working Paper: Is there a role for domestic demand pressure on export performance? (2013)
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Persistent link: https://EconPapers.repec.org/RePEc:spr:empeco:v:49:y:2015:i:4:p:1173-1189

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DOI: 10.1007/s00181-014-0908-5

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