Price and Income elasticities of international trade: The Case of Jordan
The aim of this study is to investigate empirically the economic determinations of Jordan's external trade,
through estimating the price and income elasticities of international trade. To do so, the demand functions for
both exports and imports will be specified and estimated using time series data of Jordanian economy for the
periods 1980?2012.
In this study, we show that, the sum of price elasticities of import and export demand exceeds one for Jordan
which satisfied the Marshall-Lerner condition. The results of trade elasticity indicate that devaluation is an
appropriate policy for Jordan to promote export revenues and improve trade balance.