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A demand for cuban tobacco exports

Author

Listed:
  • Manuel Cantavella-Jordá
  • Carlos Guerra

    (Universitat Jaume I, Spain
    Universidad de Camagiiey, Cuba)

Abstract

The objective of this paper is to analyze the external sector on Cuban tobacco from the export demand perspective towards the euro area. A tobacco-specific exchange rate is built to better capture the distinctions of this sector when competing overseas. We apply cointegration in the Fully-Modified Ordinary Least Squares framework and complement an error correction mechanism. It is found that both long and short-run estimates of exchange rate elasticities are significantly inelastic but present, at the same time, a high degree of stability. This means that prices become a fundamental control variable for economic policy purposes. Moreover, there is statistical evidence that income elasticity plays a significant role in the determination of exports growth for Cuban tobacco.

Suggested Citation

  • Manuel Cantavella-Jordá & Carlos Guerra, 2013. "A demand for cuban tobacco exports," Journal of Developing Areas, Tennessee State University, College of Business, vol. 47(2), pages 93-107, July-Dece.
    • Handle: RePEc:jda:journl:vol.47:year:2013:issue2:pp:93-107
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    References listed on IDEAS

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    Cited by:

    1. Kent Jones, 2018. "Cuba, Trade Dependency and the GATT/WTO System," International Advances in Economic Research, Springer;International Atlantic Economic Society, vol. 24(4), pages 325-338, November.

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    More about this item

    Keywords

    export demand; tobacco-specific exchange rate; euro area; elasticities;
    All these keywords.

    JEL classification:

    • F31 - International Economics - - International Finance - - - Foreign Exchange
    • F41 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Open Economy Macroeconomics

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