Estimated Effects of Relative Prices on Trade Shares
AbstractEstimated effects of relative prices on trade shares are presented in this paper for 64 countries. The equations are estimated using pooled time series, cross section data under the assumption that the error term is serially correlated across time and heteroskedastic across countries. The results strongly indicate that relative prices have an important effect on trade shares. The sensitivity of the properties of the multicountry model in Fair (1981a) to the endogenous treatment of trade shares is also examined. The addition of the trade share equations to the model has noticeable effects on the properties of the model regarding the effects of a depreciation. The sensitivity of trade shares to relative prices is an important channel in this version of the model through which a country's price of exports affects the demand for its exports.
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Bibliographic InfoPaper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 0696.
Date of creation: Jun 1981
Date of revision:
Publication status: published as (Published as "Estimated Effects of the October 1979 Changes in Monetary Policy on the 1980 Economy) American Economic Review, Vol. 71, no. 2(1981): 160-165.
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Other versions of this item:
- Ray C. Fair, 1981. "Estimated Effects of Relative Prices on Trade Shares," Cowles Foundation Discussion Papers, Cowles Foundation for Research in Economics, Yale University 597, Cowles Foundation for Research in Economics, Yale University.
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Oberhofer, W & Kmenta, J, 1974. "A General Procedure for Obtaining Maximum Likelihood Estimates in Generalized Regression Models," Econometrica, Econometric Society, Econometric Society, vol. 42(3), pages 579-90, May.
- Fair, Ray C, 1982.
"Estimated Output, Price, Interest Rate, and Exchange Rate Linkages among Countries,"
Journal of Political Economy, University of Chicago Press,
University of Chicago Press, vol. 90(3), pages 507-35, June.
- Ray C. Fair, 1981. "Estimated Output, Price, Interest Rate, and Exchange Rate Linkages Among Countries," Cowles Foundation Discussion Papers, Cowles Foundation for Research in Economics, Yale University 592, Cowles Foundation for Research in Economics, Yale University.
- Ray C. Fair, 1981. "Estimated Output, Price, Interest Rate, and Exchange Rate Linkages amongCountries," NBER Working Papers 0677, National Bureau of Economic Research, Inc.
- John F. Helliwell & Tim Padmore, 1982.
"Empirical Studies of Macroeconomic Interdependence,"
NBER Working Papers
1021, National Bureau of Economic Research, Inc.
- Helliwell, John F. & Padmore, Tim, 1985. "Empirical studies of macroeconomic interdependence," Handbook of International Economics, Elsevier, in: R. W. Jones & P. B. Kenen (ed.), Handbook of International Economics, edition 1, volume 2, chapter 21, pages 1107-1151 Elsevier.
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