Simultaneity between export and import flows and the Marshall–Lerner condition
AbstractThis 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.
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Bibliographic InfoArticle provided by Elsevier in its journal Economic Modelling.
Volume (Year): 29 (2012)
Issue (Month): 3 ()
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Web page: http://www.elsevier.com/locate/inca/30411
Marshall–Lerner condition; Export and import flow simultaneity; Price-elasticities; Cross elasticities;
Find related papers by JEL classification:
- F41 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Open Economy Macroeconomics
- F11 - International Economics - - Trade - - - Neoclassical Models of Trade
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