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This paper estimates the export demand equation for the Philippines using the Gregory and Hansen procedure. We allowed for structural breaks within the Gregory and Hansen framework and obtained a cointegrating relationship between real exports, real income and relative prices. Our preferred model is the level shift where all the coefficients are significant and plausible. The income elasticity of export demand is around unity and the relative price elasticity is around -1.2.
Published Online: 2009-6-9
©2011 Walter de Gruyter GmbH & Co. KG, Berlin/Boston
