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Title: |
A Reexamination of Japan's Aggregate Import Demand Function: An
Application of the Engle and Granger Two-Step Procedure |
| Author: |
Arize,
Augustine C.; Walker, Jan |
| Author
Affiliation: |
E TX State U |
| Source: |
International Economic Journal, Summer 1992, v. 6, no. 2, pp. 41-55 |
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Publication Date: |
Summer 1992 |
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Abstract: |
This paper reexamines the import demand
function of Japan. In addition to using the relatively new procedures of
cointegration and error-correction modeling, the role of effective
exchange rate on Japan's import demand is considered. The empirical
results suggest that the error-correction model performs very well. The
estimates confirm that the omission of effective exchange rate,
misspecification of the adjustment mechanism. and the use of the
price-ratio format have yielded statistically insignificant or
implausible results. The results suggest also that the recent
appreciation of the yen has caused a structural shift in Japan's import
demand behavior. |
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