Modelling Manufacturing Export Volumes Equations : A System Estimation Approach

International trade is a principle transmission mechanism by which developments in one country can have repercussions in others and how it is modelled is an important part of any multi-country model. This paper describes recent estimation work carried out by the OECD, which respecifies and updates the equations which determine manufactures export volumes in the OECD INTERLINK model. An important feature of this estimation work is that the relevant equations are estimated as a consistent system, allowing data acceptable parameter restrictions to be imposed across countries. For a number of countries and regions allowance is also made for the possible influence of supply-side factors on market share performance over and above that explained by changes in price competitiveness, using non-linear trend variables. The paper reports both estimation results and the simulation properties of the equations both in isolation and as part of corresponding country models and the fully linked ...