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AI InsightAccording to the estimation results, the real exchange rate elasticity of total export demand is found to be less than one, whereas the income elasticity is found to be greater than one.
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Abstract
In this paper, price and income elasticities of export demand are calculated. The study is extended to sectoral and country specific export demand functions. The paper presents some panel unit root and cointegration tests, which have been studied extensively in recent years. The major aim of this study is to find the price and foreign income elasticities of aggregate export demand. According to the estimation results, the real exchange rate elasticity of total export demand is found to be less than one, whereas the income elasticity is found to be greater than one.