Many studies have estimated the aggregate import demand function for Pakistan by using non-stationary data. Their findings suffer from the so-called ‘spurious regression’ problem. This study attempts to estimate the aggregate import demand function for Pakistan by employing Johansen and Juselius cointegration technique on the annual data for the period 1975-2005. Our results show that there is long-run equilibrium relationship among variables and the stability tests indicate that import demand function remains stable over the sample period and hence the estimated results are appropriate for policy implications.

Afzal, M. (2001), Import function for Pakistan: A simultaneous equation approach. The Lahore Journal of Economics, Volume 6(2), pp. 109-116.

Arize, A. and R. Afifi (1987), An econometric examination of import demand function in thirty developing countries. Journal of Post Keynesian Economics, Volume 9, pp. 604-616.

Bahmani-Oskooee, M. (1986), Determinants of international trade flows: Case of developing countries. Journal of Development Economics, Volume 20(1), pp. 107-123.

Bahmani-Oskooee, M. (1998), Cointegration approach to estimate the long-run trade elasticities in LDCs. International Economic Journal, Volume 12(3), pp. 89-96.

Bahmani-Oskooee, M. and F. Niroomand (1998), Long-run price elasticities and the Marshall-Lerner condition revisited. Economics Letters, Volume 61, pp. 101-109.

Bahmani-Oskooee, M. and O. Kara (2003), Relative responsiveness of trade flows to a change in price and exchange rate. International Review of Applied Economics, Volume 17, No. 3, pp. 293-308.

Boylan, T. A., M. P. Cuddy and I. O. Muircheartaigh (1980), The functional form of the aggregate import demand equation. Journal of International Economics, Volume 56, pp. 1-66.

Brown, R. L., J. Durbin and J. M. Evans (1975), Techniques for testing the constancy of regression relationships over time. Journal of the Royal Statistical Society, Volume 37, pp. 149-163.

Dickey, D. A. and W. A. Fuller (1979), Distribution of the estimators for autoregressive time series with a unit root. Journal of the American Statistical Association, Volume 74, pp. 427-431.

Doroodian, Khosrow, Rajindar K. Koshal and Saleh Al-Muhanna (1994), An examination of the traditional aggregate import demand function for Saudi Arabia. Applied Economics, pp. 909-915.

Durbin, James (1970), Testing for serial correlation in least squares regression when some of the regressors are lagged dependent variable. Econometrica, pp. 410-421.

Dutta, D. and N. Ahmed (1999), An aggregate import demand function of Bangladesh: A cointegration approach. Applied Economics, Volume 31, pp. 465-472.

Gafar, J. S. (1988), The determinants of import demand in Trinidad and Tobago: 1967-1984. Applied Economics, Volume 20, pp. 303-313.

Government of Pakistan, Economic Survey (Various issues). Islamabad: Ministry of Finance.

International Monetary Fund, International Financial Statistics, CD-ROM, Washington DC: IMF.

Islam, M. Anisul and Kabir Hassan (2004), An econometric estimation of the aggregate import demand function for Bangladesh: Some further results. Applied Economic letters, Volume 11, pp. 575-580.

Johansen, S. and K. Juselius (1990), Maximum likelihood estimation and inference on cointegration with applications to the demand for money. Oxford Bulletin of Economics and Statistics, Volume 52(2), pp. 169-210.

Koshal, Rajindar K., Khosrow Doroodian and Ashok Chaluvadi (1993), The behaviour of demand and supply of Thai imports. Journal of Asian Economics, pp. 363-375.

Mohammad, H. A., T. C. Tang and J. Othman (2001), Aggregate import demand and expenditure components in five ASEAN countries: An empirical study. Journal Ekonomi Malaysia, Volume 35, pp. 37-60.

Sarmad, Khwaja (1989), The determinants of import demand in Pakistan. World Development, Volume 17(10), pp. 1619-1625.

Shabbir, T. and R. Mahmood (1991), Structural change in the import demand function for Pakistan. The Pakistan Development Review, Volume 30, pp. 1159-66.

Sinha, Dipendra (1996), An aggregate import demand function for India. Rivistu Internazion & di Scienze Economiche e Commerciali, pp. 163-173.

Sinha, D. (1997), Determinants of import demand in Thailand. International Economic Journal, Volume 11(4), pp. 73-83.

Sinha, D. (2001), A note on trade elasticities in Asian countries. International Trade Journal, Volume 15(2), pp. 221-237.