Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/142577
Authors: 
Rashid, Abdul
Razzaq, Tayyaba
Year of Publication: 
2010
Series/Report no.: 
EERI Research Paper Series 15/2010
Abstract: 
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.
Subjects: 
Import Demand
Foreign Exchange Constraint
ARDL
DOLS
Pakistan
JEL: 
F14
O16
Document Type: 
Working Paper

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