An aggregate import demand function for Malaysia: A cointegration and error correction analysis
This paper examines the long run relationship between Malaysia's aggregate inports and income and relative price using Johansen cointegration analysis. Annual data for the period 1970 to 1998 were used. The estimated long run elasticities of import demand with respect to income and relative pri...
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my.uum.repo.4962016-12-06T06:31:47Z http://repo.uum.edu.my/496/ An aggregate import demand function for Malaysia: A cointegration and error correction analysis Tang, Tuck Cheong Alias, Mohammad HC Economic History and Conditions This paper examines the long run relationship between Malaysia's aggregate inports and income and relative price using Johansen cointegration analysis. Annual data for the period 1970 to 1998 were used. The estimated long run elasticities of import demand with respect to income and relative prices are 1.5 and 1.8 respectively. In the short run, growth in imports is influenced by growth in current income and relative prices. The insignificance of the lagged error correction term in the ECM implies that there is no disequilbrium in the long run relationship. AS import demand is income elastic in the long run, economic growth may have negative implications on the balance of payments. The high long run cross price elasticity suggests that domestic inflation needs to be kept in check, as domestic inflation would increase the volume of imports. Universiti Utara Malaysia 2000 Article PeerReviewed application/pdf en http://repo.uum.edu.my/496/1/Tang_Tuck_Cheong.pdf Tang, Tuck Cheong and Alias, Mohammad (2000) An aggregate import demand function for Malaysia: A cointegration and error correction analysis. Malaysian Management Journal, 5 (1&2). pp. 43-57. ISSN 0128-6226 http://mmj.uum.edu.my |
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HC Economic History and Conditions Tang, Tuck Cheong Alias, Mohammad An aggregate import demand function for Malaysia: A cointegration and error correction analysis |
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This paper examines the long run relationship between Malaysia's aggregate inports and income and relative price using Johansen cointegration analysis. Annual data for the period 1970 to 1998 were used. The estimated long run elasticities of import demand with respect to income and relative prices are 1.5 and 1.8 respectively. In the short run, growth in imports is influenced by growth in current income and relative prices. The insignificance of the lagged error correction term in the ECM implies that there is no disequilbrium in the long run relationship. AS import demand is income elastic in the long run, economic growth may have negative implications on the balance of payments. The high long run cross price elasticity suggests that domestic inflation needs to be kept in check, as domestic inflation would increase the volume of imports. |
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Article |
author |
Tang, Tuck Cheong Alias, Mohammad |
author_facet |
Tang, Tuck Cheong Alias, Mohammad |
author_sort |
Tang, Tuck Cheong |
title |
An aggregate import demand function for Malaysia: A cointegration and error correction analysis |
title_short |
An aggregate import demand function for Malaysia: A cointegration and error correction analysis |
title_full |
An aggregate import demand function for Malaysia: A cointegration and error correction analysis |
title_fullStr |
An aggregate import demand function for Malaysia: A cointegration and error correction analysis |
title_full_unstemmed |
An aggregate import demand function for Malaysia: A cointegration and error correction analysis |
title_sort |
aggregate import demand function for malaysia: a cointegration and error correction analysis |
publisher |
Universiti Utara Malaysia |
publishDate |
2000 |
url |
http://repo.uum.edu.my/496/1/Tang_Tuck_Cheong.pdf http://repo.uum.edu.my/496/ http://mmj.uum.edu.my |
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1644277806350204928 |
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13.159267 |