TY - JOUR
T1 - A cointegration analysis of Malaysian import demand function
T2 - reassessment from the bounds test
AU - Tang, Tuck Cheong
AU - Nair, Mahendhiran
PY - 2002
Y1 - 2002
N2 - This paper presents an empirical analysis of the aggregated import demand behaviour for Malaysia. The study involved a small sample of annual data from 1970 to 1998. To estimate the long-term relationship between import demand, and its determinants, namely income and relative prices, a robust estimation method known as the Unrestricted Error Correction Model - Bounds Test Analysis was used. The results show that import volume, income and relative prices are cointegrated. The estimated long-run elasticites of import demand with respect to income and relative prices are 1.5 and -1.3 respectively. This implies that monetary, fiscal and exchange rate policies can be used as instruments to maintain favourable trade balance.
AB - This paper presents an empirical analysis of the aggregated import demand behaviour for Malaysia. The study involved a small sample of annual data from 1970 to 1998. To estimate the long-term relationship between import demand, and its determinants, namely income and relative prices, a robust estimation method known as the Unrestricted Error Correction Model - Bounds Test Analysis was used. The results show that import volume, income and relative prices are cointegrated. The estimated long-run elasticites of import demand with respect to income and relative prices are 1.5 and -1.3 respectively. This implies that monetary, fiscal and exchange rate policies can be used as instruments to maintain favourable trade balance.
UR - http://www.scopus.com/inward/record.url?scp=0036250199&partnerID=8YFLogxK
U2 - 10.1080/13504850110073471
DO - 10.1080/13504850110073471
M3 - Article
AN - SCOPUS:0036250199
VL - 9
SP - 293
EP - 296
JO - Applied Economics Letters
JF - Applied Economics Letters
SN - 1350-4851
IS - 5
ER -