Table 3 reveals that the real exchange rate carries an insignificant coefficient in the import (outpayment) model but not in the export (inpayment) model, providing partial support for the aggregation bias argument.
Long-Run Coefficient Estimates of the Export (Inpayment) Function Commodities (a) Constant Ln [Y.sub.W] 1.
The main purpose is to obtain estimates of import and export demand elasticities so that we can better judge the effectiveness of currency devaluation in increasing a country's inpayments and reducing outpayments.
Finally, so far we used the estimated coefficients to assess the direct impact of real depreciation on inpayments and outpayments in each industry.
First, how do changes in the value of the dollar affect inpayments and outpayments of specific industry?
(8) From Table 1, there are 30 industries that carry significant exchange rate coefficients, and the average is--1.04, implying that a 10% depreciation increases inpayments by 10.4%.