This paper presents an empirical analysis of the aggregated import demand behaviour for Malaysia. The study involved a small sample of annual data from 1970 to 1998. To estimate the long-term relationship between import demand, and its determinants, namely income and relative prices, a robust estimation method known as the Unrestricted Error Correction Model - Bounds Test Analysis was used. The results show that import volume, income and relative prices are cointegrated. The estimated long-run elasticites of import demand with respect to income and relative prices are 1.5 and -1.3 respectively. This implies that monetary, fiscal and exchange rate policies can be used as instruments to maintain favourable trade balance.
This study aims to determine the direction of causality between national income and government expenditures for Indonesia, Malaysia, Philippines, Singapore, and Thailand. Granger causality tests are used to investigate the causal links between the two variables. Times series data covering last four decades are used. Support for the hypothesis that causality runs from government expenditures to national income has been found only in the case of Philippines. There is no evidence for this hypothesis and its reverse for the other countries.
This paper extends the work by Mah (2005) on the causality between export expansion and economic growth in China by adding imports as additional variable in a trivariate framework. Interestingly, this paper has empirically found no long-run relationships among exports, real Gross Domestic Product, and imports. This paper further shows no long- and short-run causality, at least in Granger's sense, between export expansion and economic growth in China, but economic growth does Granger-cause imports in the short run.
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