Modeling Price and Quantity Relations for Danish Manufacturing Exports.

This article develops a structural econometric model for Danish manufacturing exports. The cointegrating relations of the model are determined to be a markup pricing relation and an export demand relation, whereas the short-run structure shows pricing-to-market effects. Both long-run and short-run pricing relations are found to be empirically constant during a period of large exchange-rate variations. The model isolates the main interactions between the foreign-trade sector, the exchange rate, and domestic variables, which played a key role in the external adjustment of the economy during the sample period.