Import Demand Function for Turkey

Olcay Yucel Culha, Okan Eren and Ferya Ogunc

Working Papers from Research and Monetary Policy Department, Central Bank of the Republic of Turkey

Abstract: This study aims to revisit the import demand function for Turkey using the updated data and to examine the evolution of income and price elasticities over time. In this respect, a demand function is estimated for the total imports and its subcomponents separately, and the corresponding time varying elasticities are obtained by applying the method of Kalman filter between 2003 and 2017. Using newly published national income series (2009=100), this study finds that the growth of total imports is significantly explained by income and relative price changes. It seems that the income and expenditure elasticities have decreased over time, both in total imports and in sub-components. The decline in income elasticity is mainly due to the decrease in the consumption-expenditure elasticity. The relative price elasticity of imports of consumption and investment goods showed a limited fall over time, while the relative price elasticity of imports of intermediate goods increased significantly.

Keywords: Import demand; Income elasticity; Relative price elasticity; Kalman filter; Turkish economy (search for similar items in EconPapers)
JEL-codes: C13 C51 F17 (search for similar items in EconPapers)
Date: 2018
New Economics Papers: this item is included in nep-ara
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Citations: View citations in EconPapers (1)

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https://www.tcmb.gov.tr/wps/wcm/connect/EN/TCMB+EN ... g+Paperss/2018/18-03 (application/pdf)

Related works:
Journal Article: Import demand function for Turkey (2019)
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Persistent link: https://EconPapers.repec.org/RePEc:tcb:wpaper:1803

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