Bank of Portugal research adds new variable to explain export behaviour

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A working paper published by the Bank of Portugal finds evidence that traditional models of export behaviour based on exchange rates and foreign demand fail to tell the whole story.

The paper, Is there a role for domestic demand pressure on export performance?, by Paulo Soares Esteves and António Rua, examines Portuguese data from 1980 to 2012, incorporating quarterly data on both domestic and foreign demand, and exchange rates.

The authors conclude that domestic demand "significantly and

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