SFB 303 Discussion Paper No. B - 33

Author: Welsch, Heinz
Title: A Forecasting Model of Aggregate Import Demand for Nine Countries
Abstract: It is shown that a class of import demand equations widely accepted on the basis of compatibility with demand theory, goodness of fit and statistical reliability tends to generate unreasonable import ratios in simulations outside the reference period. This is traced back to the neglection of budget effects of price movements which is found inappropriate for a large expenditure category like imports. A function is specified, estimated and tested witch overcomes these shortcomings.
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Creation-Date: November 1985
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