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The elasticity of substitution between imported and domestically produced goods in Germany

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  • Lächler, Ulrich
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    Abstract

    The elasticity of substitution concept has become one of the mainstays in the measurement of price responsiveness not only in production theory, where it originates, but also in the study of international trade. It has been applied, for example, in the context of the world demand for exports from two competing sources (Richardson (1973), Zelder (1958)),to estimate one country's relative demand for imports from competing foreign sources (Hickman and Lau (1973), Morgan and Corlett (1951)), and to estimate one country's demand for imports relative to domestic substitutes (Alaouze (1\9 77), Mutti (1977)). The present paper pursues the last issue by examining the elasticity of substitution between the demand for commodity imports and domestic substitutes in the Federal Republic of Germany, using data disaggregated at an industry level.

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    Paper provided by Kiel Institute for the World Economy in its series Kiel Working Papers with number 200.

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    Date of creation: 1984
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    Handle: RePEc:kie:kieliw:200

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    1. Paul S. Armington, 1970. "Adjustment of Trade Balances: Some Experiments with a Model of Trade among Many Countries (Ajustement de la balance commerciale: quelques expériences avec un modèle d'échanges internationaux)," IMF Staff Papers, Palgrave Macmillan, vol. 17(3), pages 488-526, November.
    2. Irving Kravis & Robert E. Lipsey, 1974. "International Trade Prices and Price Proxies," NBER Chapters, in: The Role Of The Computer In Economic And Social Research in Latin America, pages 253-268 National Bureau of Economic Research, Inc.
    3. Nancy D. Ruggles, 1974. "The Role Of The Computer In Economic And Social Research in Latin America," NBER Books, National Bureau of Economic Research, Inc, number rugg74-1.
    4. Richardson, J. David, 1973. "Beyond (but back to?) the elasticity of substitution in international trade," European Economic Review, Elsevier, vol. 4(4), pages 381-392, December.
    5. Hickman, Bert G. & Lau, Lawrence J., 1973. "Elasticities of substitution and export demands in a world trade model," European Economic Review, Elsevier, vol. 4(4), pages 347-380, December.
    6. Gregory, R G, 1971. "United States Imports and Internal Pressure of Demand: 1948-68," American Economic Review, American Economic Association, vol. 61(1), pages 28-47, March.
    7. Paul S. Armington, 1969. "A Theory of Demand for Products Distinguished by Place of Production (Une théorie de la demande de produits différenciés d'après leur origine) (Una teoría de la demanda de productos dis," IMF Staff Papers, Palgrave Macmillan, vol. 16(1), pages 159-178, March.
    8. Verdoorn, P. J. & Schwartz, A. N. R., 1972. "Two alternative estimates of the effects of EEC and EFTA on the pattern of trade," European Economic Review, Elsevier, vol. 3(3), pages 291-335, November.
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    Cited by:
    1. Foders, Federico, 1984. "The UN convention on the law of the sea: an inefficient public good supplied by an inefficient organization," Kiel Working Papers 204, Kiel Institute for the World Economy.
    2. Gerken, Egbert & Gross, Martin & Lächler, Ulrich, 1984. "The causes and consequences of steel subsidization in Germany," Kiel Working Papers 214, Kiel Institute for the World Economy.

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