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Foreign Trade Regimes and Import Demand Function: Evidence from Sri Lanka

Author

Listed:
  • M. Shahe Emran

    (Department of Economics, Stanford University)

  • Forhad Shilpi

    (World Bank)

Abstract

Time 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.

Suggested Citation

  • M. Shahe Emran & Forhad Shilpi, 2001. "Foreign Trade Regimes and Import Demand Function: Evidence from Sri Lanka," International Trade 0012002, University Library of Munich, Germany, revised 04 Apr 2002.
    • Handle: RePEc:wpa:wuwpit:0012002
    Note: Type of Document - Tex; prepared on IBM PC ; to print on HP; figures: none. Tables included.. none
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    References listed on IDEAS

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    More about this item

    Keywords

    Trade Policy; Import demand; Sri Lanka; Cointegration; Intertemporal elasticity of substitution;
    All these keywords.

    JEL classification:

    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • O16 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Financial Markets; Saving and Capital Investment; Corporate Finance and Governance

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