An estimation of Armington elasticities at the EU-28 level

Abstract

The Armington substitution elasticity is a key parameter for trade-policy analysis. The purpose of this study then is no other than to re-estimate NEST 11 Armington elasticities making use of the upgraded versions of WIOD databases. Short-run as well as long-run elasticities Armington elasticities at the EU-28 level for 2 different industry classifications will be estimated, providing this way to energy and policy modellers an updated numerical value of the former ones. The estimation will be performed for the temporal period departing from 2000 up to 2014. Our analysis is going to be oriented towards an estimation of the Armington elasticities for intermediate goods (intermediate demand) and final goods (final demand).