Estimating Supply and Demand Functions in International Trade: A Multivariate Cointegration Analysis for Germany
In this paper aggregate supply and demand functions for Germany's imports and exports are estimated for the period 1975:1-1999:4. Previous studies are extended in two regards: First, the multivariate estimation technique of Johansen (1988, 1991) is employed, which helps to avoid the potential bias of the predominately used single-equation approaches. Second, structural error-correction models are estimated for the import and export market. This allows for conclusions about the short-run response of buyers and sellers in both markets to changes in their forcing variables.
Volume (Year): 224 (2004)
Issue (Month): 5 (September)
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