Price and Income Elasticity of Indian Exports—The Role of Supply-Side Bottlenecks
July 17, 2015
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Summary
This paper estimates the short-term and long-run price and income elasticity of Indian exports, and investigates the role of supply-side bottlenecks in shaping India’s export demand relationship. We use disaggregated export volume data for 45 Indian industries over the period 1990-2013, as well as industry-specific international relative prices, for estimation. Our results indicate that Indian exports are sensitive to international relative-price competitiveness, world demand, and energy shortages. In addition, binding supply-side constraints (notably energy shortages) dampen price responsiveness in the short-term.
Subject: Export performance, Export prices, Exports, International trade, National accounts, Personal income, Price elasticity, Prices
Keywords: disaggregated export datum, elasticity, elasticity estimate, energy shortages, export, export basket, export demand, export demand equation, export demand function, export destination, Export performance, Export prices, Exports, Global, goods export, income and price elasticity, income elasticity, India, India's export basket, industries export, manufacturing, merchandise export data, Personal income, price, Price elasticity, product, volume indices, WP
Pages:
16
Volume:
2015
DOI:
Issue:
161
Series:
Working Paper No. 2015/161
Stock No:
WPIEA2015161
ISBN:
9781513544816
ISSN:
1018-5941
