Export and import demand in Peru: estimated price and income elasticities, January 2012-February 2022
DOI:
https://doi.org/10.35319/lajed.20223845Keywords:
International trade, price and income elasticity, cointegrationAbstract
Using monthly data for the period January 2012-February 2022 and a distributed lag autoregressive model with the subsequent error correction mechanism, this study estimates the price and income elasticities of real exports and imports in Peru, considering the United States as the baseline trading partner. The results show that: (i) only the flow of real exports (total, traditional and non-traditional) increases significantly during the Covid-19 crisis (March 2020-February 2022); (ii) the income elasticity of real trade is positive in the short run, and negative -in most flows- in the long run. However, there is no consensus for the price elasticity; (iii) there is a bidirectional relationship in real trade, generating higher exports through imports of consumer goods, inputs and capital goods.
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