Estimating Import-Demand Function in ARDL Framework

Arbeitspapier

We develop a structural econometric model of import demand for Pakistan, with binding foreign exchange constraint. ARDL and DOLS techniques are used to estimate the log-run coefficients of price and income elasticities. The empirical results from ARDL bound testing approach and Johansen’s method for cointegration show strong evidence of the existence of a long-run stable relationship among the variables included in the import demand model. The price and income elasticity estimates have correct signs and are statistically significant. The coefficient of scarcity premium, as it appeared statistically significant with correct sign, confirms the presence of a binding foreign exchange constraint on aggregate import demand, particularly before the period of trade liberalization.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: EERI Research Paper Series ; No. 15/2010

Classification and Topics

• Classification: Wirtschaft ; Empirical Studies of Trade ; Economic Development: Financial Markets; Saving and Capital Investment; Corporate Finance and Governance
• Subject: Import Demand ; Foreign Exchange Constraint ; ARDL ; DOLS ; Pakistan

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Rashid, Abdul ; Razzaq, Tayyaba
• Event: Veröffentlichung
• (who): Economics and Econometrics Research Institute (EERI)
• (where): Brussels
• (when): 2010

Further information

• Handle: http://hdl.handle.net/10419/142577
• Last update: 10.03.2025, 11:45 AM CET