TESTING DYNAMIC SPECIFICATIONS FOR IMPORT DEMAND MODELS: THE CASE OF COTTON Report as inadecuate




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Error correction models impose few prior restrictions on dynamic model specificationand allow the data to determine model structure. Despite this obvious advantage, few applications have adopted the error correction model to explain trade flows. An error correction model of cotton import demand is estimated for France, Japan, and Hong Kong. A variety of tests are applied to determine the dynamic structure of the model.We find the most general models are those that best fit the data for cotton importdemand. Long-run elasticities from these general models are significantly different than elasticities derived from a comparable static model.

Subject(s): Crop Production/Industries

International Relations/Trade

Issue Date: 1993

Publication Type: Working or Discussion Paper

PURL Identifier: http://purl.umn.edu/51119

Total Pages: 28

Series Statement: Working Paper

93-2

Record appears in: International Agricultural Trade Research Consortium > Working Papers





Author: Arnade, Carlos Anthony ; Pick, Daniel H. ; Vasavada, Utpal

Source: http://ageconsearch.umn.edu/record/51119?ln=en







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