Simultaneity between export and import flows and the Marshall–Lerner condition

Luis Sastre

Economic Modelling, 2012, vol. 29, issue 3, 879-883

Abstract: This paper presents an analytical reformulation of the Marshall–Lerner condition under the assumption that the independence of the GDP from the exchange rate cannot be postulated in open economies in which the foreign trade flow/GDP ratio is high. This paper attempts to analyse how, in open economies in which the export and import flow/GDP ratio is very high, independence between the GDP and the exchange rate is not a plausible assumption, so the traditional version of the Marshall–Lerner condition is not sustained.

Keywords: Marshall–Lerner condition; Export and import flow simultaneity; Price-elasticities; Cross elasticities (search for similar items in EconPapers)
JEL-codes: F11 F41 (search for similar items in EconPapers)
Date: 2012
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:ecmode:v:29:y:2012:i:3:p:879-883

DOI: 10.1016/j.econmod.2011.10.011

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