Thirlwall’s Law and the Stability of Export and Import Income Elasticities

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• Data Appendix
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• Data construction
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• Income (Y), exports (X) and imports (M) are defined as real GDP, real exports and
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• real imports all in terms of US dollars taken from the OECD Annual National
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• Accounts 1973-95, while all price data were taken from the International Financial
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• Statistics. The price of domestic exports (Px( was defined as the export price index
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• (EPI) depending whether this was available otherwise the export unit value (EUV)
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• was used. Domestic price of imports (Pm ) is defined as the wholesale price index
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• (WPI), while the foreign price of imports again depending on availability was the
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• import price index otherwise the import unit value was used. The world income variable (z) was calculated by using the proportion of exports
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• to each country multiplied by its income level and this variable was calculated for
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• each country. The weights used are the same for every 5-year period. For example
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• we collected the share of exports for yhears 1980, 1985, 1990 and 1995 as the
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• weights. The advantage of this method is that it allows for changing trading patterns
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• for each country over time. The world income for exporter j in year t is:
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