Revisiting the South African aggregate import demand : A view from expenditure components
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Date
2012
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Publisher
University of Stellenbosch
Abstract
This paper examines the long run and short run relationship between South African aggregate imports and expenditure components and the price of imports relative to the price of domestic substitutes (RP) using the bounds test approach. Annual data for the period 1970-2009 are used. The final demand expenditure variable is disaggregated into final consumption expenditure (FCE), investment expenditure (EIG) and exports expenditure (EX). The use of a disaggregated demand variable, as opposed to a single demand variable, is justified by the possibility that each final demand component may have different import contents. The major findings are; first, aggregate import demand is co-integrated with its determinants, second, different components of final demand expenditure have different impacts on aggregate import demand in both the short and long-run periods.
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Keywords
Exports expenditure, Investment expenditure, Final consumption expenditure, Aggregate imports, South Africa
Citation
Ziramba, E. (2012). Revisiting the South African aggregate import demand : A view from expenditure components. Journal for Studies in Economics and Econometrics, 36(2), 67-83