determination of import demand in pakistan: the role of expenditure components
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ID: 172831
2011
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Abstract
The paper uses imperfect substitution approach to derive
the aggregate import demand function on the basis of disaggregated
expenditure components. This derived import demand function is then
empirically tested for Pakistan by using co-integration and error
correction mechanism. The empirical results show that elasticity of
import demand with respect to different macro components of final
expenditure is different. The import demand in Pakistan is affected
positively and significantly by all expenditure components. The relative
prices have negative but insignificant relationship with import demand in
Pakistan. The findings indicate that use of aggregate expenditure
variable in the aggregate import demand function leads to aggregation
bias because different macro components of final expenditure have
different import contents. The model derived in this study provides indepth
guidelines for macroeconomic policy decisions in order to
overcome the problem of persistent trade deficit in the country.
| Reference Key |
chani2011theoreticaldetermination
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|---|---|
| Authors | ;Muhammad Irfan CHANI;Zahid PERVAIZ;Amatul R. CHAUDHARY |
| Journal | 2019 ieee 6th international conference on industrial engineering and applications, iciea 2019 |
| Year | 2011 |
| DOI |
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