Aggregate import demand function for slovakia: Evidence from ardl bounds testing approach

Ozturk I., ACARAVCI A.

Actual Problems of Economics, vol.119, no.5, pp.353-360, 2011 (SSCI, Scopus) identifier identifier

  • Publication Type: Article / Article
  • Volume: 119 Issue: 5
  • Publication Date: 2011
  • Journal Name: Actual Problems of Economics
  • Journal Indexes: Social Sciences Citation Index (SSCI), Scopus
  • Page Numbers: pp.353-360
  • Keywords: Aggregate import demand function, Bounds tests analysis, Slovakia
  • Hatay Mustafa Kemal University Affiliated: Yes

Abstract

This paper estimates the aggregate import demand function for Slovakia, using recent cointegration approach, the ARDL bounds testing approach, for the quarterly period of 1993:1-2003:3. The results show that real import, relative price and real GDP are cointegrated. The CUSUM and CUSUMSQ stability tests indicate that there exists a stable import demand function. The results imply that price stabilization policies may not be used as instruments to maintain a favorable trade balance for Slovakia. Therefore, for a sustainable trade balance, the development of local industries should be encouraged in order to have less import.