Intra- and Extra-Euro Area Import Demand for Manufactures
AbstractThe aim of this paper is to improve our understanding of the key determinants of intra- and extra-euro area imports. Using a simultaneous equation estimation framework, and pooling the data across nine euro area countries as an approximation of the euro area, we estimate intra- and extra-euro area import demand functions and impose various restrictions within and across equations. We find that there are significant substitution effects btween intra- and extra-euro area imports due to changes in their relative prices, while exchange rate volatility decreases trade vis-à-vis regions characterised by high volatility and leads to substitution of trade away from higher-volatility regions towards lower-volatility regions.
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Bibliographic InfoArticle provided by Duncker & Humblot, Berlin in its journal Applied Economics Quarterly.
Volume (Year): 53 (2007)
Issue (Month): 3 ()
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Web page: http://www.duncker-humblot.de
Other versions of this item:
- Anderton, Robert & Baltagi, Badi H. & Skudelny, Frauke & Sousa, Nuno, 2005. "Intra- and extra-euro area import demand for manufactures," Working Paper Series 0532, European Central Bank.
- F10 - International Economics - - Trade - - - General
- F15 - International Economics - - Trade - - - Economic Integration
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