From macro to micro and macro back: Macroeconomic trade elasticities in a developing economy

Fil: Palazzo, Gabriel. CEDES. Centro de Estudios de Estado y Sociedad. Área de Economía; Argentina.

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Detalles Bibliográficos
Autores principales: Palazzo, Gabriel, Rapetti, Martín
Formato: Artículo publishedVersion
Lenguaje:Inglés
Publicado: 2023
Materias:
COMERCIO
TIPO DE CAMBIO
ESTRUCTURA PRODUCTIVA
PAÍSES EN DESARROLLO
Acceso en línea:http://repositorio.cedes.org/handle/123456789/4735
Aporte de:
Respositorio Digital CRIS del CEDES - Centro de Estudios de Estado y Sociedad de Centro de Estudios de Estado y Sociedad (CEDES)
id I61-R167-123456789-4735
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spelling I61-R167-123456789-47352023-08-02T18:32:55Z From macro to micro and macro back: Macroeconomic trade elasticities in a developing economy De lo macro a lo micro y de lo macro a la inversa: elasticidades comerciales macroeconómicas en una economía en desarrollo Palazzo, Gabriel Rapetti, Martín COMERCIO TIPO DE CAMBIO ESTRUCTURA PRODUCTIVA PAÍSES EN DESARROLLO Fil: Palazzo, Gabriel. CEDES. Centro de Estudios de Estado y Sociedad. Área de Economía; Argentina. Fil: Rapetti, Martín. CEDES. Centro de Estudios de Estado y Sociedad. Área de Economía; Argentina. A long tradition in economic theory has seen the real exchange rate (RER) as a key determinant of trade performance. Several empirical studies, however, have found low estimates of macro trade elasticities and, as a result, questioned this argument. In this paper, we show that to understand and estimate the effect of RER on trade performance, it is crucial to explore the existence of heterogeneous responses of individual products to RER movements. Using trade data from Argentina, we employ the Mean Group method to estimate macro trade elasticities by individual products disaggregated at four digits of the SITC; rev.2. We find a wide range of heterogeneous responses of exports and imports to RER movements at the individual product level. We find that the estimated RER-elasticities in differentiated products and labor-intensive manufacturing goods are substantially larger than those of primary and homogeneous products. Based on the estimated elasticities at the product level, we obtain a “low” aggregate RER-elasticity of exports when we weigh them by the country's trade basket. We show that this result is a consequence of Argentina's economic structure, a country whose exports are heavily specialized in primary and homogeneous products. Our results are important because they help build a bridge between two conflicting views in the RER-economic development literature. Even in countries with “low” aggregate macro RER-elasticities, the real exchange rate may be an important variable for economic performance. An undervalued RER may facilitate economic growth by stimulating investment in activities producing more complex/differentiated goods in countries that specialize in the production of primary and homogeneous goods and, as a result, have “low” trade elasticities. This seems to be the case of several countries in Latin America, including Argentina. 2023-08-02T17:39:53Z 2023-08-02T17:39:53Z 2023-06 Artículo info:eu-repo/semantics/publishedVersion info:eu-repo/semantics/article info:ar-repo/semantics/artículo Palazzo, G.; Rapetti, M. From macro to micro and macro back: Macroeconomic trade elasticities in a developing economy. Struct Change Econ Dyn. 2023, 65:223-52. Disponible en: http://repositorio.cedes.org/handle/123456789/4735. http://repositorio.cedes.org/handle/123456789/4735 10.1016/j.strueco.2023.02.015 eng info:eu-repo/semantics/closedAccess application/pdf Struct Change Econ Dyn. 2023, 65:223-52
institution Centro de Estudios de Estado y Sociedad (CEDES)
institution_str I-61
repository_str R-167
collection Respositorio Digital CRIS del CEDES - Centro de Estudios de Estado y Sociedad
language Inglés
topic COMERCIO
TIPO DE CAMBIO
ESTRUCTURA PRODUCTIVA
PAÍSES EN DESARROLLO
spellingShingle COMERCIO
TIPO DE CAMBIO
ESTRUCTURA PRODUCTIVA
PAÍSES EN DESARROLLO
Palazzo, Gabriel
Rapetti, Martín
From macro to micro and macro back: Macroeconomic trade elasticities in a developing economy
topic_facet COMERCIO
TIPO DE CAMBIO
ESTRUCTURA PRODUCTIVA
PAÍSES EN DESARROLLO
description Fil: Palazzo, Gabriel. CEDES. Centro de Estudios de Estado y Sociedad. Área de Economía; Argentina.
format Artículo
publishedVersion
Artículo
Artículo
author Palazzo, Gabriel
Rapetti, Martín
author_facet Palazzo, Gabriel
Rapetti, Martín
author_sort Palazzo, Gabriel
title From macro to micro and macro back: Macroeconomic trade elasticities in a developing economy
title_short From macro to micro and macro back: Macroeconomic trade elasticities in a developing economy
title_full From macro to micro and macro back: Macroeconomic trade elasticities in a developing economy
title_fullStr From macro to micro and macro back: Macroeconomic trade elasticities in a developing economy
title_full_unstemmed From macro to micro and macro back: Macroeconomic trade elasticities in a developing economy
title_sort from macro to micro and macro back: macroeconomic trade elasticities in a developing economy
publishDate 2023
url http://repositorio.cedes.org/handle/123456789/4735
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