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The price elasticity of external demand of Portuguese exports: a comparison with other euro area countries
We compute the price elasticity of external demand of Portuguese exports in the period 1995-2009, comparing it with other euro area countries. This proxy of the export price elasticity is calculated as a weighted average of the import demand elasticities in each individual country-product destination market, using the elasticities of substitution across imported varieties of Broda et al. (2006). Overall, Portugal tends to export to individual markets that have, on average, a lower price elasticity than the markets where other euro area countries export to. Therefore, the product and geographical composition of Portuguese exports reduces their exposure to relative price fluctuations.