Aggregate Import Demand Function For Saudi Arabia: An Error Correction Approach

Journal Article

Al-Yousef, Khalid I. Aldakhil and Nourah . 2002

• نوع عمل المنشور: Research Paper
• رابط المنشور على الويب: Journal of Economic & Administrative Sciences
• المجلة \ الصحيفة: Journal of Economic & Administrative Sciences
• رقم العدد: 18
• رقم الإصدار السنوي: 1
• الصفحات: 83-100

مستخلص المنشور

The paper attempts to analyze Saudi Arabia’s aggregate demand for imports. Cointegration analysis and two different approaches of Error Correction (Engle-Granger’s and Hendry’s error correction models) were applied to contrast their performance in fitting the Saudi data. It is found that in both models, domestic price, import price, and income are important in determining the import demand. The empirical results show that aggregate import demand tends to be income and price elastic. Moreover, the results give an evidence that Engle-Granger approach outperforms the other model in terms of having the smallest ex-post forecast errors.