Estimating Trade Equations from Aggregate Bilateral Data

27 Pages Posted: 14 Feb 2006

See all articles by Tamim Bayoumi

Tamim Bayoumi

International Monetary Fund (IMF); Centre for Economic Policy Research (CEPR)

Multiple version iconThere are 2 versions of this paper

Date Written: May 1999

Abstract

This paper uses bilateral data on 420 merchandise trade flows between 21 industrial countries are used to estimate standard trade equations. The data set of over 11,000 observations allows the underlying elasticities to be estimated with considerable precision. Remarkably, a single specification appears to explain behavior across these countries in spite of the large number of individual flows analyzed. The results indicate a powerful long-run effect from supply on exports. Also, the real exchange rate elasticity depends upon the behavior of third country exchange rates. There is evidence of pricing to market and of a J-curve.

Keywords: Trade elasticities, panel data

JEL Classification: F11, F12, F17

Suggested Citation

Bayoumi, Tamim, Estimating Trade Equations from Aggregate Bilateral Data (May 1999). IMF Working Paper, Vol. , pp. 1-27, 1999. Available at SSRN: https://ssrn.com/abstract=880601

Tamim Bayoumi (Contact Author)

International Monetary Fund (IMF) ( email )

700 19th Street NW
Washington, DC 20431
United States
202-623-6333 (Phone)
202-623-4795 (Fax)

Centre for Economic Policy Research (CEPR)

London
United Kingdom

Here is the Coronavirus
related research on SSRN

Paper statistics

Downloads
109
Abstract Views
926
rank
258,847
PlumX Metrics