Export Demand Elasticities as Determinants of Growth: Estimates for Mauritius
Habiyaremye, Alexis and Ziesemer, Thomas (2008). Export Demand Elasticities as Determinants of Growth: Estimates for Mauritius. UNU-MERIT.
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Author Habiyaremye, Alexis
Ziesemer, ThomasTitle Export Demand Elasticities as Determinants of Growth: Estimates for Mauritius Publication Date 2008 Publisher UNU-MERIT Abstract In this paper, we combine the export-led and import-led growth hypotheses in a growth model in which the importation of foreign capital goods and the demand elasticities of own export products explain the growth opportunities and the technical progress of developing countries. This model, based on imported capital goods uses Mauritius’ data on capital investment, employment, export partners’ growth and terms of trade to estimate price and income elasticities of export demand, total-factor productivity growth and economies of scale. These elasticities are then used to assess how the growth in export partners’ income is converted into domestic growth. The implications of the presence of low or high export demand elasticities are discussed by relating them to various strands of trade and growth literature. Based on the results of this estimation, we also calculate steady-state growth rates, engine and handmaiden effects of growth as well as the dynamic steady-state gains from trade for this latecomer export economy. The implications of steady state results are also discussed in the light of the Mauritian employment and growth perspectives. Keyword Growth model
Trade in capital goods
Exports
Total factor productivityJEL O11
O19
O41
F43Copyright Holder UNU-MERIT Copyright Year 2008 ISSN 1871-9872 -
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