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The price elasticity of external demand: how does Portugal compare with other euro area countries?

Author

Listed:
  • Cristina Manteu
  • Sónia Cabral

Abstract

This paper estimates the price elasticity of external demand of Portuguese exports in the period 1995-2009 and compares it with those of other euro area countries. This proxy of the export price elasticity is computed as a weighted average of the import demand elasticities in each individual country-product destination market, using the elasticities of substitution across imported varieties of Broda et al. (2006). Overall, Portugal tends to export to individual markets which have, on average, a lower price elasticity than the markets where other euro area countries export to. Therefore, the product and geographical composition of Portuguese exports reduces their exposure to relative price fluctuations.

Suggested Citation

  • Cristina Manteu & Sónia Cabral, 2011. "The price elasticity of external demand: how does Portugal compare with other euro area countries?," Working Papers w201127, Banco de Portugal, Economics and Research Department.
    • Handle: RePEc:ptu:wpaper:w201127
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    File URL: https://www.bportugal.pt/sites/default/files/anexos/papers/wp201127.pdf
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    References listed on IDEAS

    as
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    Cited by:

    1. Daniele Siena, 2014. "The European Monetary Union and Imbalances: Is it an Anticipation Story ?," Working papers 501, Banque de France.
    2. Daniele Siena, 2021. "The Euro Area Periphery and Imbalances: Is it an Anticipation Story?," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 40, pages 278-308, April.

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    More about this item

    JEL classification:

    • F12 - International Economics - - Trade - - - Models of Trade with Imperfect Competition and Scale Economies; Fragmentation
    • F14 - International Economics - - Trade - - - Empirical Studies of Trade

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