Estimating the Trade Elasticity over Time

No 1903, Working Papers from Florida International University, Department of Economics

Abstract: Using quarterly data on the U.S. imports from its major trading partners and the corresponding trade costs, this paper estimates the trade elasticity by using a panel structural vector autoregressive model that can distinguish between short-run versus long-run elasticity measures in a continuous way and is robust to any endogeneity problem. The estimated trade elasticity measures are highly consistent with studies in alternative literatures, suggesting a short-run value of about 1 (after one quarter), a medium-run value of about 5 (after one year), and a long-run value of about 7 (after five years).

Keywords: Trade Elasticity; Short-run; Medium-run; Long-run (search for similar items in EconPapers)
JEL-codes: F13 F14 (search for similar items in EconPapers)
Pages: 16 pages
Date: 2019-09
New Economics Papers: this item is included in nep-int
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Citations: View citations in EconPapers (12)

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https://economics.fiu.edu/research/pdfs/2019_working_papers/1903.pdf First version, 2019 (application/pdf)

Related works:
Journal Article: Estimating the trade elasticity over time (2019)
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Persistent link: https://EconPapers.repec.org/RePEc:fiu:wpaper:1903

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