Re-Examination of the Marshall-Lerner Condition in Peru at a Disagregated Level: An Analysis in the Unbalanced Panel

20 Pages Posted: 29 Oct 2012 Last revised: 5 Oct 2014

See all articles by Jose Nolazco

Jose Nolazco

University of Chile - Department of Economics

Date Written: June 1, 2012

Abstract

The research proposes a new theoretical model and re-evaluates the Marshall-Lerner condition at the level of disaggregation of a digit according to the Standard International Trade Classification (SITC) for exports and imports from Peru using unbalanced panel data for the period 1980-2010. Using a panel SUR (Seemingly Unrelated Regression) show that the Marshall-Lerner condition is fulfilled only for sectors 1 (beverages and tobacco) and 7 (machinery and transport equipment). Therefore sectors 0 (food and live animals), 2 (crude materials, inedible, except fuels) 3 (mineral fuels, lubricants), 4 (animal and vegetable oils, fats), 5 (chemicals) and 6 (manufactured goods ) are not sensitive to before a depreciation of the exchange rate and therefore in the long run does not improve the trade balance for these sectors.

Keywords: Marshall-Lerner condition, exports, imports, long-term elasticities, panel SUR

JEL Classification: E5, E6, F41

Suggested Citation

Nolazco, Jose, Re-Examination of the Marshall-Lerner Condition in Peru at a Disagregated Level: An Analysis in the Unbalanced Panel (June 1, 2012). Available at SSRN: https://ssrn.com/abstract=2167989 or http://dx.doi.org/10.2139/ssrn.2167989

Jose Nolazco (Contact Author)

University of Chile - Department of Economics ( email )

Diagonal Paraguay 257
Torre 26, Of. 1801
Santiago
Chile

Do you have negative results from your research you’d like to share?

Paper statistics

Downloads
117
Abstract Views
802
Rank
427,869
PlumX Metrics