An Import demand function for the Australian economy using Vector Autoregression techniques

Research output: Chapter in Book/Report/Conference proceedingConference proceeding contribution

Abstract

The recent growth in the Chinese economy appears to have contributed to the recent mining boom in Australia. While Australia’s mining industry is an export-oriented industry, the imported capital equipment suggests that there may be a relationship between exports and imports. This paper analyses whether imports are likely to be affected by exports. While this question has received some attention in the literature, this is the first Australian study to investigate this relationship using a Vector Autoregression (VAR) approach. This VAR model thus incorporates lagged values of imports and exports as explanatory variables. To develop this model, data from 1984-2012 was used. The data was tested for stationarity; and these tests conclude that there is a statistically significant cointegrating relationship between imports and exports. Policymakers may benefit from an understanding of this relationship; as such an understanding might assist them in the formulation of future international trade policy for Australia.
Original languageEnglish
Title of host publicationProceedings Book of ICEFMO, 2013
Subtitle of host publicationMalaysia Handbook on the Economic, Finance and Management Outlooks
PublisherPAK Publishing Group
Pages736-755
Number of pages20
ISBN (Print)9789699347146
Publication statusPublished - 2013
EventInternational Conference on Economic, Finance and Management Outlooks - Kuala Lumpur, Malaysia
Duration: 5 Oct 20136 Oct 2013

Conference

ConferenceInternational Conference on Economic, Finance and Management Outlooks
CountryMalaysia
CityKuala Lumpur
Period5/10/136/10/13

Keywords

  • Imports
  • VAR
  • VECM

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