Pakistan's Import Demand Impacted by Foreign Exchange Constraints, Study Finds.
The researchers estimated Pakistan's import demand function using a new model. They used ARDL and DOLS techniques to find long-term relationships between price, income, and import demand. The results showed strong evidence of stable relationships among the variables. Price and income elasticity estimates were significant and had the right signs. The scarcity premium coefficient confirmed a foreign exchange constraint on import demand, especially before trade liberalization.