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Trade Agreements and Trade Opportunities: A Flexible Approach for Modeling Australian Export and Import Elasticities
Author(s) -
Fox Kevin J.,
Kohli Ulrich,
Shiu Alice
Publication year - 2010
Publication title -
review of international economics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.513
H-Index - 58
eISSN - 1467-9396
pISSN - 0965-7576
DOI - 10.1111/j.1467-9396.2010.00907.x
Subject(s) - complementarity (molecular biology) , economics , international economics , international trade , bilateral trade , trade barrier , substitution (logic) , free trade , geography , genetics , archaeology , computer science , china , biology , programming language
Abstract Patterns of trade have changed enormously over the last 30 years, particularly due to the economic emergence of several Asian countries. With the increasing international tendency for bilateral preferential trade agreements, it is important for countries to be aware of trade substitution possibilities. This paper estimates import and export price elasticities for Australia and its major trading partners in Europe and Asia, 1958 to 2002, using a fully flexible version of the Symmetric Normalized Quadratic aggregator function. Imports and exports are disaggregated into six regions, covering 17 countries. Our results illuminate the (changing) substitution and complementarity patterns for Australian foreign trade, highlighting trading opportunities in the face of a changing international environment.