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Price and Income Elasticity of Imports: The Case of Pakistan

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  • Khurram Ashfaq Baluch
  • Syed Kalim Hyder Bukhari

Abstract

The 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].

Suggested Citation

  • Khurram Ashfaq Baluch & Syed Kalim Hyder Bukhari, 2012. "Price and Income Elasticity of Imports: The Case of Pakistan," Working Papers id:4899, eSocialSciences.
    • Handle: RePEc:ess:wpaper:id:4899
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    Cited by:

    1. Mahmood, Asif & Zahoor, Muhammad Awais, 2021. "Role of Global Value Chains and Exchange Rate: An Empirical Examination in case of Pakistan," MPRA Paper 115958, University Library of Munich, Germany.
    2. Hafsa Hina, 2020. "Correction of Trade Deficit through Depreciation - A Misdirected Policy: An Empirical Evidence from Pakistan," PIDE-Working Papers 2020:24, Pakistan Institute of Development Economics.
    3. Hafsa Hina, 2021. "What Do We Know of Trade Elasticities?," PIDE Knowledge Brief 2021:30, Pakistan Institute of Development Economics.

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    More about this item

    Keywords

    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);
    All these keywords.

    JEL classification:

    • C22 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes
    • F10 - International Economics - - Trade - - - General
    • F14 - International Economics - - Trade - - - Empirical Studies of Trade

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