 Traditional Export Demand Relation: A Cointegration and Parameter Constancy AnalysisInternational Journal of Applied Econometrics and Quantitative Studies, 2008, vol. 5, issue 2 Abstract: This study empirically estimates the critical parameters of the aggregate export demand function for Jordan by using annual time series data (1970-2004) and by applying both Johansen-Juselius and Saikkonen-Lütkepohl multivariate cointegration procedures. The empirical results confirm that there exists a unique and significant long-run equilibrium relationship among exports, foreign income, relative export price, and domestic output. Our estimation results show that income elasticity is much larger than unity while export price elasticity is slightly above one. The long-run estimate of the export price elasticity reveal that the Marshall-Lerner condition is satisfied for Jordan and currency devaluation may be effective in improving Jordanian exports and her trade balance. Moreover, domestic output has a positive and significant impact on Jordanian exports. Finally, tests for the parameter constancy suggested by Hansen and Johansen (1999) reveal that the hypothesis of stable long-run elasticities could not be rejected. Keywords: Export demand; Elasticity; Cointegration; Stability analysis (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:eaa:ijaeqs:v:5:y2008:i:2_4 Ordering information: This journal article can be ordered from Access Statistics for this article More articles in International Journal of Applied Econometrics and Quantitative Studies from Euro-American Association of Economic Development |
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