ARDL Approach to the Demand for Disaggregate Imports: the case of Iran

Abstract

In this article, demand equations for import of consumer, intermediate and capital goods for the period 1971(2) to 1999(1), is estimated and analyzed, using the ARDL Pesaran & Shin method. The results show that the behavior of the different categories of imported goods in Iran is best explained by the parallel market exchange rate, implying this rate is a closer approximation fir the opportunity cost of Importers, despite their access to foreign exchange at official or controlled rates.