Functional Form for United States - Mexico Trade Equations
Thomas Fullerton (),
W Charles Sawyer and
Richard L Sprinkle Additional contact information W Charles Sawyer: University of Southern Mississippi
Richard L Sprinkle: University of Texas at El Paso
Abstract:
Empirical trade equations estimated using aggregate data may impose ill- advised coefficient restrictions. Export demand equations are estimated using quarterly data for bilateral trade flows between the United States and Mexico. The sample period is 1981-1994. Right-hand-side variables include foreign prices, domestic prices, the exchange rate, and income. Estimation results indicate that merchandise exports react heterogeneously to variations in each of the three relative price components.