Foreign Trade Regimes and Import Demand Function: Evidence from Sri Lanka
AbstractTime series data for Sri Lanka span periods of pervasive trade and exchange restrictions along with periods of liberalized trade. This paper implements a structural econometric model of aggregate imports which incorporates the implications of the shifts in the policy regime. The results demonstrate that the model outperforms the existing alternatives both on statistical and economic grounds. The estimated elasticities, in contrast to the available evidence, have correct signs, high statistical significance, and plausible magnitudes. The implications for policy analysis like calculation of equilibrium exchange rate are discussed. Special Note: If you are looking for the paper titled "Import Demand Under Trade and Exchange Rate Restrictions: A Structural Econometric Approach with an Application to India", it has been withdrwan temporarily. A revised version will be posted in near future.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by EconWPA in its series International Trade with number 0012002.
Date of creation: 08 Feb 2001
Date of revision: 04 Apr 2002
Note: Type of Document - Tex; prepared on IBM PC ; to print on HP; figures: none. Tables included.. none
Contact details of provider:
Web page: http://22.214.171.124
Trade Policy; Import demand; Sri Lanka; Cointegration; Intertemporal elasticity of substitution;
Find related papers by JEL classification:
- F14 - International Economics - - Trade - - - Empirical Studies of Trade
- O16 - Economic Development, Technological Change, and Growth - - Economic Development - - - Financial Markets; Saving and Capital Investment; Corporate Finance and Governance
This paper has been announced in the following NEP Reports:
- NEP-ALL-2001-02-27 (All new papers)
- NEP-DEV-2001-02-27 (Development)
- NEP-IFN-2001-02-27 (International Finance)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- David De La Croix & Jean-Pierre Urbain, 1998.
"Intertemporal substitution in import demand and habit formation,"
Journal of Applied Econometrics,
John Wiley & Sons, Ltd., vol. 13(6), pages 589-612.
- Croix,David,de la & Urbain,Jean-Pierre, 1996. "Intertemporal substitution in import demand and habit formation ," Research Memorandum 003, Maastricht University, Maastricht Research School of Economics of Technology and Organization (METEOR).
- de la Croix, David & Urbain, Jean-Pierre, 1996. "Intertemporal Substitution in Import Demand and Habit Formation," Discussion Papers (IRES - Institut de Recherches Economiques et Sociales) 1996002, Université catholique de Louvain, Institut de Recherches Economiques et Sociales (IRES).
- Caporale, Guglielmo Maria & Pittis, Nikitas, 1999. " Efficient Estimation of Cointegrating Vectors and Testing for Causality in Vector Autoregressions," Journal of Economic Surveys, Wiley Blackwell, vol. 13(1), pages 1-35, February.
- Richard H. Clarida, 1991.
"Co-Integration, Aggregate Consumption, and the Demand For Imports: A Structural Econometric Investigation,"
NBER Working Papers
3812, National Bureau of Economic Research, Inc.
- Clarida, Richard H, 1994. "Cointegration, Aggregate Consumption, and the Demand for Imports: A Structural Econometric Investigation," American Economic Review, American Economic Association, vol. 84(1), pages 298-308, March.
- Clarida, R.H., 1992. "Cointegration, Aggregate Consumption and the Demand for Imports: A Struct ural Econometric Investigation," Discussion Papers 1992_29, Columbia University, Department of Economics.
- Richard H. Clarida, 1992. "Cointegration, aggregate consumption, and the demand for imports: a structural econometric investigation," Research Paper 9213, Federal Reserve Bank of New York.
- Carmen M. Reinhart, 1995.
"Devaluation, Relative Prices, and International Trade: Evidence from Developing Countries,"
IMF Staff Papers,
Palgrave Macmillan, vol. 42(2), pages 290-312, June.
- Reinhart, Carmen, 1995. "Devaluation, Relative Prices, and International Trade: Evidence from Developing Countries," MPRA Paper 6974, University Library of Munich, Germany.
- Bahmani-Oskooee, Mohsen & Niroomand, Farhang, 1998. "Long-run price elasticities and the Marshall-Lerner condition revisited," Economics Letters, Elsevier, vol. 61(1), pages 101-109, October.
- Cheung, Yin-Wong & Lai, Kon S, 1993. "Finite-Sample Sizes of Johansen's Likelihood Ration Tests for Conintegration," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 55(3), pages 313-28, August.
- Shahe Emran, M. & Shilpi, Forhad, 1996. "Foreign exchange rationing and the aggregate import demand function," Economics Letters, Elsevier, vol. 51(3), pages 315-322, June.
- Bertola, Giuseppe & Faini, Riccardo, 1990. "Import demand and non-tariff barriers: The impact of trade liberalization : An application to Morocco," Journal of Development Economics, Elsevier, vol. 34(1-2), pages 269-286, November.
- Goldstein, Morris & Khan, Mohsin S., 1985. "Income and price effects in foreign trade," Handbook of International Economics, in: R. W. Jones & P. B. Kenen (ed.), Handbook of International Economics, edition 1, volume 2, chapter 20, pages 1041-1105 Elsevier.
- Pesaran, M.H. & Shin, Y., 1995. "An Autoregressive Distributed Lag Modelling Approach to Cointegration Analysis," Cambridge Working Papers in Economics 9514, Faculty of Economics, University of Cambridge.
- Bahmani-Oskooee, Mohsen, 1986. "Determinants of international trade flows : The Case of Developing Countries," Journal of Development Economics, Elsevier, vol. 20(1), pages 107-123.
- Pesaran, M. Hashem & Shin, Y. & Smith, R.J., 1999.
"Bounds Testing Approaches to the Analysis of Long-run Relationships,"
Cambridge Working Papers in Economics
9907, Faculty of Economics, University of Cambridge.
- M Pesaran & Yongcheol Shin & Richard J Smith, 2004. "Bounds Testing Approaches to the Analysis of Long Run Relationships," ESE Discussion Papers 46, Edinburgh School of Economics, University of Edinburgh.
- Adnan Mazarei, 1995. "Imports Under a Foreign Exchange Constraint," IMF Working Papers 95/97, International Monetary Fund.
- Athukorala, Prema-chandra & Rajapatirana, Sarath, 2000. "Liberalization and Industrial Transformation: Lessons from the Sri Lankan Experience," Economic Development and Cultural Change, University of Chicago Press, vol. 48(3), pages 543-72, April.
- Neary, J.P & Roberts, K.W.S, 1978.
"The Theory of Household Behaviour under Rationing,"
The Warwick Economics Research Paper Series (TWERPS)
132, University of Warwick, Department of Economics.
- Carmen Reinhart, 1994.
"Devaluation, Relative Prices, and International Trade,"
IMF Working Papers
94/140, International Monetary Fund.
- Reinhart, Carmen, 1994. "Devaluation, Relative Prices, and International Trade," MPRA Paper 13708, University Library of Munich, Germany.
- Caporale, Guglielmo Maria & Chui, Michael K F, 1999. "Estimating Income and Price Elasticities of Trade in a Cointegration Framework," Review of International Economics, Wiley Blackwell, vol. 7(2), pages 254-64, May.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (EconWPA).
If references are entirely missing, you can add them using this form.