Simultaneous estimation of income and price elasticities of export demand, scale economies and total factor productivity growth for Brazil

Abstract

This paper focuses on a model in which low (high) export demand elasticities and the fact that developing countries are importers of capital goods help explaining the slow (high) growth of these countries. The question arises whether export demand elasticities are low or high. For answering this question, export demand elasticities for the case of Brazil are estimated using a growth model. As a by-product of estimating the model, we obtain estimates for total-factor productivity growth and for scale economies. Based on the results from estimation we calculate steady-state growth rates, engine and handmaiden effects of growth as well as dynamic steady-state gains from trade. The model and the results are discussed in regard to several strands of literature.

The impact of the credit crisis on poor developing countries: Growth, worker remittances, accumulation and migration

“…The ordinary time trend would be associated with total factor productivity growth, whereas world income is an argument in the export function of models with imported inputs (see Mutz and Ziesemer 2008). With an insignificant time trend when both are included, the latter seems to be more relevant than the former in developing countries.…”

“…As we need the world GDP here and not its per capita value, but we need OECD GDP per capita in the migration and remittance equations we have put world GDP and OECD per capita into the error correction model although this implies a certain asymmetry in regard to using per capita terms. See also the footnote relating growth results to the model used by Mutz and Ziesemer (2008). 5 The ideal response to serial correlation in growth regressions is probably to merge models of growth and cycles.…”

Measuring Multidimensional Vulnerability in Afghanistan

“…Equation (4), explaining worker remittances as a percentage of GDP wr/gdp, is the logical next in their export function (see Mutz and Ziesemer 2008 for a theoretical formulation and estimation of an explicit growth model without linearization). 14 The ideal response to serial correlation in growth regressions is probably to merge models of growth and cycles.…”

“…As China gets an increasing share in World GDP and has a high growth rate, these are quite reasonable results for economies which import their capital goods and therefore are driven by the world income term 20 significant. The ordinary time trend would be associated with total factor productivity growth, whereas world income is an argument in the export function of models with imported inputs (see Mutz and Ziesemer 2008). As the time trend is insignificant when both are included, world income seems to be more relevant than the former in developing countries.…”

“…This can be used to transform the GDP of the OECD into a GDP per capita. See also the footnote relating results to the growth model used by Mutz and Ziesemer (2008). 13 The standard steady-state assumption from growth theory would be a constant value of all variables which are expressed as a share of GDP and constant growth rates.…”