COINTEGRATION APPROACH TO ESTIMATING BILATERAL TRADE ELASTICITIES BETWEEN U.S. AND HER TRADING PARTNERS

Authors: BAHMANI-OSKOOEE, MOHSEN¹; BROOKS, TAGGERT J.²

Source: International Economic Journal, Volume 13, Number 4, Number 4/winter 1999 , pp. 119-128(10)

Publisher: Routledge, part of the Taylor & Francis Group

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Abstract:

Almost all previous authors who estimated the trade elasticities relied upon aggregate trade data. To avoid the aggregation bias, this paper provides estimates of trade elasticities using bilateral data between the united states and her six largest trading partners. Application of cointegration analysis reveals that in many cases, bilateral trade elasticities are large enough to justify real depreciation of the dollar as a mean of improving U.S. trade balance. [F14]

Document Type: Research article

DOI: http://dx.doi.org/10.1080/10168739900080032

Affiliations: 1: University of Wisconsin-Milwaukee 2: University of Wisconsin-La Crosse

Publication date: 1999-12-01