Publication:
Trade Elasticities in Aggregate Models: Estimates for 191 Countries

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dc.contributor.authorDevarajan, Shantayanan
dc.contributor.authorRobinson, Sherman
dc.contributor.authorGo, Delfin Sia
dc.date.accessioned2023-07-11T21:13:35Z
dc.date.available2023-07-11T21:13:35Z
dc.date.issued2023-07-11
dc.description.abstractArmington’s insight that imports and domestically produced goods were imperfect substitutes has unleashed extensive estimates of the associated trade elasticity, primarily for developed countries. This notion of product differentiation, which extends symmetrically to exports and domestic goods, has underpinned trade-focused, computable general equilibrium models of developing countries, including the aggregate, compact version, the 1–2–3 model. Noting that estimates of trade elasticities for developing countries are few, this paper remedies the situation. Using the vector error correction model as the primary method and controlling for global trends and other factors, the analysis derives the long-run elasticity estimates for 191 countries, ranging from China (population of 1.4 billion) to Tuvalu (11,200), including 45 of 48 Sub-Saharan African countries and understudied countries such as Benin, the Republic of Congo, Niger, Fiji, Haiti, Kiribati, and Tajikistan. Import and export elasticities of high-income countries average about 1.4, reflecting the greater diversity of their economies; developing countries’ elasticities average around 0.7 for imports and 0.6 for exports. Elasticities generally rise with per capita income. That the elasticity is greater than one for developed and less for developing countries implies asymmetric responses to shocks, which conforms to intuition and corroborates the analytical results from the 1–2–3 model.en
dc.identifierhttp://documents.worldbank.org/curated/en/099524306202324085/IDU01ba09ebe0931f04f070a11c0471fc38ea0e2
dc.identifier.doi10.1596/1813-9450-10490
dc.identifier.urihttps://openknowledge.worldbank.org/handle/10986/39981
dc.languageEnglish
dc.language.isoen
dc.publisherWorld Bank, Washington, DC
dc.relation.ispartofseriesPolicy Research Working Papers; 10490
dc.rightsCC BY 3.0 IGO
dc.rights.holderWorld Bank
dc.rights.urihttps://creativecommons.org/licenses/by/3.0/igo/
dc.subjectTRADE ELASTICITIES
dc.subjectARMINGTON
dc.subjectEXPORT ELASTICITY
dc.subjectECONOMETRIC ESTIMATE
dc.subjectTRADE POLICY
dc.titleTrade Elasticities in Aggregate Modelsen
dc.title.subtitleEstimates for 191 Countriesen
dc.typeWorking Paper
dspace.entity.typePublication
okr.crossref.titleTrade Elasticities in Aggregate Models: Estimates for 191 Countries
okr.date.disclosure2023-06-20
okr.date.doiregistration2025-04-07T08:22:30.811935Z
okr.date.doiregistration2025-04-08T16:10:42.855073Z
okr.date.doiregistration2025-04-09T03:00:41.470070Z
okr.date.lastmodified2023-06-20T00:00:00Zen
okr.doctypePolicy Research Working Paper
okr.doctypePublications & Research
okr.docurlhttp://documents.worldbank.org/curated/en/099524306202324085/IDU01ba09ebe0931f04f070a11c0471fc38ea0e2
okr.guid099524306202324085
okr.identifier.docmidIDU-1ba09ebe-931f-4f07-a11c-471fc38ea0e2
okr.identifier.doi10.1596/1813-9450-10490
okr.identifier.doihttp://dx.doi.org/10.1596/1813-9450-10490
okr.identifier.externaldocumentum34098318
okr.identifier.internaldocumentum34098318
okr.identifier.reportWPS10490
okr.import.id1042
okr.importedtrueen
okr.language.supporteden
okr.pdfurlhttp://documents.worldbank.org/curated/en/099524306202324085/pdf/IDU01ba09ebe0931f04f070a11c0471fc38ea0e2.pdfen
okr.topicMacroeconomics and Economic Growth::Consumption
okr.topicMacroeconomics and Economic Growth::Econometrics
okr.topicInternational Economics and Trade::Export Competitiveness
okr.unitProspects Group (DECPG)
relation.isAuthorOfPublicationddcdf87a-9a86-50e0-b365-0d2c747a0607
relation.isAuthorOfPublication165325f4-d27a-5241-80a4-eb5495c41c24
relation.isAuthorOfPublication.latestForDiscoveryddcdf87a-9a86-50e0-b365-0d2c747a0607
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