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350411

Estimating of Import Demand Function in Egypt

Article

Last updated: 28 Dec 2024

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Abstract

This study aims to estimate the determinants of import demand in Egypt, utilizing the ordinary least squares (OLS) approach and the vector error correction model (VECM) for the period (1982-2021). The results of the study indicate a positive and significant relationship between the demand for imports and exports, evident in both short and long-term perspectives. Additionally, a negative and significant relationship is identified between import demand and the real effective exchange rate. These findings carry implications for Egypt's balance of payments. The surge in imports, driven by the concurrent increase in exports, serves as a crucial source of foreign exchange, enabling the country to meet fundamental needs for food commodities and production requirements. However, a caveat is noted: if the growth rate of imports surpasses that of real income, it may lead to a deterioration in the trade balance. In conclusion, the paper emphasizes the necessity to foster export-led growth and underscores the importance of carefully considering alternative strategies, particularly given the limited impact of currency depreciation on import dynamics. Furthermore, the study recommends monitoring inflation trends to gain insights into potential shifts in consumer preferences towards imported goods.

DOI

10.21608/inp.2024.350411

Keywords

Import Demand Function, OLS, Vector Error Correction Model (VECM), cointegration, Egypt

Authors

First Name

Fatma

Last Name

Elhamalawy

MiddleName

-

Affiliation

Assistant Professor of Economics- International Economic Relations Center – Institute of National Planning.

Email

fatma.khamis@inp.edu.eg

City

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Orcid

-

Volume

32

Article Issue

1

Related Issue

47148

Issue Date

2024-03-01

Receive Date

2024-04-16

Publish Date

2024-03-01

Page Start

114

Page End

87

Print ISSN

1110-984X

Online ISSN

2785-9940

Link

https://inp.journals.ekb.eg/article_350411.html

Detail API

https://inp.journals.ekb.eg/service?article_code=350411

Order

350,411

Type

المقالة الأصلية

Type Code

1,811

Publication Type

Journal

Publication Title

المجلة المصرية للتنمية والتخطيط

Publication Link

https://inp.journals.ekb.eg/

MainTitle

Estimating of Import Demand Function in Egypt

Details

Type

Article

Created At

28 Dec 2024