Modeling manufactured imports: Methodological issues with evidence from Australia
AbstractThis paper investigates the relationship between manufactured import flows to Australia, and relative prices and domestic economic activity net of cyclical demand effects over the period 1981Q3 to 1991Q2. This is done through the estimation of import demand functions for total manufactured imports and nine major import categories using the general to specific modeling approach. We find that the homotheticity assumption on activity elasticity is met in most cases. The price elasticity estimates for individual categories range from 0.32 to 2.1, with a weighted-average of 0.52. We also find some evidence of upward bias in price elasticity estimates when an aggregate import function is employed in a context where a significant portion of imports are subject to quantitative restrictions (QRs).
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Bibliographic InfoArticle provided by Elsevier in its journal Journal of Policy Modeling.
Volume (Year): 17 (1995)
Issue (Month): 6 (December)
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Web page: http://www.elsevier.com/locate/inca/505735
Other versions of this item:
- Premachandra Athukorala & Jayant Menon, 1995. "Modelling Manufactured imports: Methodological Issues with Evidence From Australia," Centre of Policy Studies/IMPACT Centre Working Papers g-112, Victoria University, Centre of Policy Studies/IMPACT Centre.
- F32 - International Economics - - International Finance - - - Current Account Adjustment; Short-term Capital Movements
- F17 - International Economics - - Trade - - - Trade Forecasting and Simulation
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- Jayant Menon, 1993. "Import Price and Activity Elasticities for the MONASH Model: Johansen FIML Estimation of Cointegration Vectors," Centre of Policy Studies/IMPACT Centre Working Papers ip-58, Victoria University, Centre of Policy Studies/IMPACT Centre.
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- Andrew C. Harvey, 1990. "The Econometric Analysis of Time Series, 2nd Edition," MIT Press Books, The MIT Press, edition 2, volume 1, number 026208189x, December.
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