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An Analysis of the Determinants of Imports

Author

Listed:
  • Tracey Horton

    (Reserve Bank of Australia)

  • Jenny Wilkinson

    (Reserve Bank of Australia)

Abstract

The econometric technique of cointegration is used to model the aggregate demand for imports in Australia over the period from September 1974 to September 1989. We find that movements in total and endogenous imports are well explained by movements in domestic demand, the relative price of imports, the relative price of exports, and the level of overtime. The demand for imports is found to be more responsive to changes in demand than to changes in prices, although movements in prices have an impact on import demand over a longer period of time. Our models explain almost all of the rapid growth of imports over the period from September 1986 to September 1989, and over this period we find that the contribution to growth in imports of relative prices outweighs that of demand.

Suggested Citation

  • Tracey Horton & Jenny Wilkinson, 1989. "An Analysis of the Determinants of Imports," RBA Research Discussion Papers rdp8910, Reserve Bank of Australia.
    • Handle: RePEc:rba:rbardp:rdp8910
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    File URL: https://www.rba.gov.au/publications/rdp/1989/8910.html
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    Cited by:

    1. Alberto Alesina & David W. R. Gruen & Matthew T. Jones, 1991. "Fiscal Adjustment, The Real Exchange Rate and Australia's External Imbalance," Australian Economic Review, The University of Melbourne, Melbourne Institute of Applied Economic and Social Research, vol. 24(3), pages 38-51, July.
    2. David W.R. Gruen, 1991. "The Effect of Steady Inflation on Interest Rates and the Real Exchange Rate in a World with Free Capital Flows," RBA Research Discussion Papers rdp9101, Reserve Bank of Australia.
    3. Jenny Wilkinson, 1992. "Explaining Australia's Imports: 1974–1989," The Economic Record, The Economic Society of Australia, vol. 68(2), pages 151-164, June.
    4. Cortes, Maria, 2007. "Examining Patterns of Bilateral Trade between Australia and Colombia by Using Cointegration Analysis and Error-Correction Models," Economics Working Papers wp07-20, School of Economics, University of Wollongong, NSW, Australia.
    5. Des Moore, 1990. "Debt ‐ Is It Still A Problem?," Australian Economic Review, The University of Melbourne, Melbourne Institute of Applied Economic and Social Research, vol. 23(3), pages 17-32, September.
    6. Jacqueline Dwyer & Christopher Kent, 1993. "A Re-examination of the Determinants of Australia’s Imports," RBA Research Discussion Papers rdp9312, Reserve Bank of Australia.
    7. Christopher Kent & Patricia Scott, 1991. "The Direction of Australian Investment from 1985/86 to 1988/89," RBA Research Discussion Papers rdp9106, Reserve Bank of Australia.

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