A Reexamination Of South Korea¡¯S Aggregate Import Demand Function: The Bounds Test Analysis
This paper uses a robust estimation method referred to as the unrestricted error correction model - the bounds test analysis to re-analyze the long-term relationships between the demand for imports and it¡¯s determinants for South Korea over the period 1980-2000. Our results show that the volume of imports, income, and relative prices are all cointegrated. The estimated long-run (short-run) elasticities of import demand with respect to income and relative price are 1.86 (0.86) and -0.2 (-0.05), respectively. The major implication of our study is that neither monetary nor fiscal policies may be used as instruments to maintain the trade balance in South Korea¡¯s favor during this sample period.
Volume (Year): 30 (2005)
Issue (Month): 1 (June)
|Contact details of provider:|| Web page: http://www.jed.or.kr/|
More information through EDIRC
References listed on IDEAS
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.:
- Tuck Cheong Tang, 2008. "Aggregate Import Demand Function for Japan: A Cointegration Re-investigation," Global Economic Review, Taylor & Francis Journals, vol. 37(3), pages 363-377.
- Tuck Cheong Tang & Mahendhiran Nair, 2002. "A cointegration analysis of Malaysian import demand function: reassessment from the bounds test," Applied Economics Letters, Taylor & Francis Journals, vol. 9(5), pages 293-296.
- Granger, C. W. J. & Newbold, P., 1974. "Spurious regressions in econometrics," Journal of Econometrics, Elsevier, vol. 2(2), pages 111-120, July.
- Salas, Javier, 1982. "Estimation of the structure and elasticities of Mexican imports in the period 1961-1979," Journal of Development Economics, Elsevier, vol. 10(3), pages 297-311, June.
- Dilip Dutta & Nasiruddin Ahmed, 1999. "An aggregate import demand function for Bangladesh: a cointegration approach," Applied Economics, Taylor & Francis Journals, vol. 31(4), pages 465-472.
- Farley, John U. & Hinich, Melvin & McGuire, Timothy W., 1975. "Some comparisons of tests for a shift in the slopes of a multivariate linear time series model," Journal of Econometrics, Elsevier, vol. 3(3), pages 297-318, August.
- Costas Milas, 1998. "Demand for Greek imports using multivariate cointegration techniques," Applied Economics, Taylor & Francis Journals, vol. 30(11), pages 1483-1492.
- Bardsen, G., 1988. "On The Estimation Of Long Run Coefficients In Error Correction Models," Papers 03-88, Norwegian School of Economics and Business Administration-.
- Dipendra Sinha, 1997. "Determinants of Import Demand in Thailand," International Economic Journal, Taylor & Francis Journals, vol. 11(4), pages 73-873.
- Bardsen, Gunnar, 1989. "Estimation of Long Run Coefficients in Error Correction Models," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 51(3), pages 345-50, August.
When requesting a correction, please mention this item's handle: RePEc:jed:journl:v:30:y:2005:i:1:p:119-128. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Changhui Kang)
If references are entirely missing, you can add them using this form.