53-62

• Βάμβουκας, Γεώργιος Α.

This paper, using data from Greece, provides additional evidence on the effectiveness of devaluation in trade balance adjustment. The validity of the Marshall-Lerner (ML) condition is investigated by employing a modern econometric technique based on error correction modelling, cointegration analysis and seemingly unrelated regression (SURE) strategy. The evidence reported in this paper argues that over a relevant policy horizon devaluations alter relative prices and affect the trade balance negatively. This result leads us to conclude that the ML condition is not valid in the case of Greece.

• Economics and Business

• Economics

ªarshall - Lerner Condition, Cointegration Analysis, SURE Methodology

JEL classification: F31, F14, P22