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The relationship between real income and real exports is examined for the Spanish economy in the last century (1901-1999) using annual data. The significant changes of the Spanish economy during this period have made of the analysis a mixed one. The export-led growth hypothesis is supported during the economic liberalization period whereas for the protectionist and autarkic period neither a long-run nor a short-run relationship between those two variables are found. When the century as a whole is considered, then, a unidirectional causality running from income to exports is exhibited.

Conventional models examining the relationship between devaluation and exports are based on exchange rate pass through. These suggest that after devaluation exports become cheaper, relative to other exports, and the growing export market is posited to stimulate the economy. If devaluation has a differential effect across commodities, countries can expect different results depending on their portfolios. Therefore, any accurate analysis of the effects of devaluation must take into account the components of a country's export portfolio. The pooled time series estimation for Latin American countries reveals a negative short-run relationship between real devaluation and export growth for most exports at a disaggregated level. The results of this study are far reaching as they suggest that more targeted policies are better suited to stimulate exports.

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