The%20Elasticity%20of%20Substitution%20in%20Demand%20for%20Non%2DTradable%20Goods%20in%20Latin%20America%3A%20The%20Case%20of%20Argentina

Working Papers (Research Network)

The Elasticity of Substitution in Demand for Non-Tradable Goods in Latin America: The Case of Argentina


CODE: R-485
AUTHOR(s): Clemente, Alejandra , González-Rozada, Martín , Neumeyer, Pablo Andrés , Sasson, Diego Luciano , Trachter, Nicholas
PUBLISHED: August 2004
LANGUAGE: English
RELATED TOPICS: Macroeconomics
DOWNLOAD FILE IN: English

Abstract:

The objective of this paper is to estimate the elasticity of substitution in the demand for non-tradable goods relative to tradable goods in Argentina. This parameter plays a crucial role in the analysis of the macroeconomic equilibrium of a small open economy (Mendoza, Galindo and Izquierdo, 2003). Using two data sets, estimates of approximately 0.40 and 0.48, respectively, are found for this elasticity.

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