Import demand function for Bangladesh: A rolling window analysis

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.