Abstract

This study aims to estimate aggregate import demand function for Bangladesh economy by using the data of 1980 to 2008. Estimation evidence provided by using autoregressive distributed lag (ADRL) approach to cointegration and rolling window regression method to estimate the coefficient of each observation in the sample by fixing the window size. The estimation result confirms long run relationship between imports, relative price and economic activity, and long run economic growth elasticity is (0.93) positive and relative price elasticity in the long run (-0.29) is negative. In contrast regression results of rolling window method demonstrates that the long run elasticities of national income variable are vary in the range of 0.81 to 0.96 and the relative price elasticities are negative according to the theory except few years.

Key words: Bangladesh, import demand, autoregressive distributed lag.