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

M. Shahe Emran () and Forhad Shilpi

International Trade from EconWPA

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.

Keywords: Trade Policy; Import demand; Sri Lanka; Cointegration; Intertemporal elasticity of substitution (search for similar items in EconPapers)
JEL-codes: F14 O16 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-dev and nep-ifn
Date: 2001-02-08, Revised 2002-04-04
Note: Type of Document - Tex; prepared on IBM PC ; to print on HP; figures: none. Tables included.. none
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Persistent link: http://EconPapers.repec.org/RePEc:wpa:wuwpit:0012002

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