An Aggregate Import Demand Function: An Empirical Investigation by Panel Data for Latin American and Caribbean Countries

The IUP Journal of Applied Economics, Vol. 8, Nos. 5 & 6, pp. 65-72, September & November 2009

Posted: 15 Oct 2009

See all articles by Ilhan Ozturk

Ilhan Ozturk

Cag University

Ali Acaravci

Mustafa Kemal University

Date Written: October 12, 2009

Abstract

This paper estimates the aggregate import demand function for Latin American and Caribbean countries, using the dynamic panel data methods, over the period 1975-2005. Consistent with theoretical postulates, this paper finds that the demand for import responds negatively to an increase in the relative prices and positively to an increase in real income. The results imply that fiscal or monetary policies may be used as policy instruments to keep inflation at a reasonable rate so as to rectify any trade imbalances. In addition, for a sustainable trade balance, the development of more local industries should be encouraged to lower the import content.

Suggested Citation

Ozturk, Ilhan and Acaravci, Ali, An Aggregate Import Demand Function: An Empirical Investigation by Panel Data for Latin American and Caribbean Countries (October 12, 2009). The IUP Journal of Applied Economics, Vol. 8, Nos. 5 & 6, pp. 65-72, September & November 2009. Available at SSRN: https://ssrn.com/abstract=1487473

Ilhan Ozturk (Contact Author)

Cag University ( email )

Mersin
Turkey

Ali Acaravci

Mustafa Kemal University ( email )

Hatay
Turkey

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