Price and Income Elasticity of Imports: The Case of Pakistan
AbstractThe paper estimates the elasticity of Imports with respect to relative prices and income for Pakistan from 1971 to 2009. What distinguishes this paper from the earlier studies is the use of robust estimation technique of Autoregressive Distributed Lag (ARDL) model utilizing the bounds test procedure. The results point to cointegration among the variables. The estimated long run elasticity of Imports with respect to relative prices and income are -0.53 and 1.22 respectively. [SBP WP No. 48]. URL:[http://www.sbp.org.pk/publications/wpapers/2012/wp48.pdf].
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Income Elasticity; exports; Price; Pakistan; Balance of Payments (BoP) account; foreign deficit; GDP; exchange rate; relative prices; imports; demand; Autoregressive Distributed Lag model (ARDL); substitution industries; Ordinary Least Squares (OLS);
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