A dynamic analysis of France's external trade

Tassos Belessiotis and Giuseppe Carone

MPRA Paper from University Library of Munich, Germany

Abstract: The purpose of the present paper is to review the sources of France's trade surplus in recent years and to attribute trade balance movements strictly to those determinants of trade flows suggested by economic theory. These determinants are price and/or cost developments, and demand in France and in the rest of the world. A primary objective of the paper is to analyse the dynamics of adjustment of trade flows to changes in competitiveness and in relative demand. To do so, a cointegration/error-correction model is applied to flows of both imports and exports, and the estimates of key elasticities obtained are instrumental in shedding light on this question.

Keywords: France trade balance; price competitiveness; export import; cointegration regression (search for similar items in EconPapers)
JEL-codes: F1 E27 C22 C50 (search for similar items in EconPapers)
Date: 1997-10

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Persistent link: http://EconPapers.repec.org/RePEc:pra:mprapa:745

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