Economic Progress Report

HC Deb 29 July 1983 vol 46 cc723-4W

Mr. Gould

asked the Chancellor of the Exchequer what is the evidence for the price and cost elasticities cited in the July issue of the economic progress report.

Mr. Lawson

The cost competitiveness elasticities referred to in the July issue of the economic progress report are based on the export and import equations in the Treasury macro-economic model in use in December 1981. The equations are described in the macro-economic model technical manual 1982, pp. 41–43 and 45–48, a copy of which is available in the House of Commons Library. The competitiveness elasticity quoted for exports of manufactures of about-0.5 is lower than that shown in the manual, reflecting further research.