The elasticity of Substitution in demand for Non tradable Goods in Latin America. Case Study: Argentina
Pablo Andres Neumeyer
Martín Gonzalez Rozada
This objective of this paper is to estimate the elasticity of substitution in the demand for non-tradable goods relative to tradable goods in Argentina. This parameter plays a crucial role in the analysis of the macroeconomic equilibrium of a small open economy (Mendoza, Galindo and Izquierdo (2003)). Using two data sets we found estimates for this elasticity of, approximately, 0.40 and 0.48.